Posted in Behavioral Finance, Market Timing, tagged Brett Arends, DALBAR, fund flows, indexing, Investment Company Institute, S&P 500, TrimTabs Investment Research, Wall Street Journal on September 30, 2010 | 5 Comments »
That investors buy at the top and sell at the bottom is a sad truth that has been well-established as typical financial behavior. A column in today’s Wall Street Journal raises the question: what should investors do about that?
The usual answer is to argue for indexing — if we “can’t” beat the market, we might as well join it. But the Journal’s Brett Arends says the better answer is to bet against the herd: when the market is going up, get out. When it’s going down, buy. (more…)
Posted in Global Investing, tagged Growth of Public Debt, Public Debt Per Capita, The Economist on September 30, 2010 | 2 Comments »
Two more images that bring a topic of interest to global investors into a bright light. The Economist has created a series of fascinating interactive maps which capture debt information by country.
Here is 2010 public debt per capita:
Posted in Diversification, tagged diversified portfolio, Ken French, Risk on September 29, 2010 | 1 Comment »
One of the most common refrains in the financial media and among investors is that the idea and practice of diversification failed in the crash of 2008 and has been proven to be, at best, a theoretical idealization.
In July 2009, the Wall Street Journal published an article called Failure of a Failsafe Strategy Sends Investors Scrambling in which the author laid out the arguments that would suggest that diversification had not worked for investors. Shortly after, I wrote an article in Financial Planning magazine that attempted to counter this thinking. (more…)
Posted in Behavioral Finance, Long-term investing, tagged Networth IQ, Richer Retirement, StikK.com on September 28, 2010 | Leave a Comment »
Now that Behavioral Finance has begun to identify so many of our financial and investing failings, what can we do about them? (more…)
Posted in Global Investing, Long-term investing, tagged Alternative Energy, Chile, Christian Wagner, Eisner Amper, Longview Capital, Timothy Speiss on September 28, 2010 | 1 Comment »
September was supposed to be rocky, but overall the month’s shaping up fairly well.
Christian Wagner of Longview Capital, and Timothy Speiss, of Eisner Amper LLP, were sounding particularly upbeat in a recent Fox Business interview, outlining a pretty rosy big picture view and the long-term trends they’re betting on. (See clip below) For Speiss, Energy and Technology are appealing. (more…)
Posted in Income Investing, tagged buybacks, dividend yield, dividends, executive compensation, S&P500 on September 27, 2010 | 1 Comment »
I came across a nice site for looking at the long-term dividend yield for the S&P500. Going back to the late 1800′s, we are currently near historic lows for the dividend yield for the S&P500. Sometimes a picture really is worth one thousand words, and that is the case here.
There are two major reasons why yields could be very low. (more…)
Posted in Behavioral Finance, tagged Behavioral Finance, Boglehead's Unite, Bogleheads, Dunning-Kruger effect, Index Funds, Morningstar, Paul Keck, Smart Investing on September 24, 2010 | 2 Comments »
Commentary by Paul Keck.
You might assume from reading the title that I’m saying investors aren’t as smart as they think. Not exactly. What I am saying is the smartest individual investors know they aren’t that smart.
They know they aren’t smart enough to:
Posted in Wealth, tagged Carl Richards, Gordon Gekko, HIP Investing, INFY, Nell Minow, NVO, R. Paul Herman, The Corporate Library, Wall Street 2 on September 23, 2010 | 1 Comment »
Wall Street 2 hits theaters tomorrow. For one sign of how much time’s passed since the original take a look at Gordon Gekko’s old cell phone in the movie trailer below. But of course far more has changed — from the 401 (k) explosion to high speed trading and the derivative economy. Other than it’s location there’s not much of the old Wall Street left.
Portfolioist asked a panel of experts, a bit tongue-in-cheek, to weigh in on how things have changed in the 23 years since Michael Douglas first uttered a variant of “Greed is Good”. And what Wall Street 2 would have been about if they’d been behind the cameras. Below hear from corporate governance and movie expert Nell Minow, New York Times blogger and financial advisor Carl Richards, and socially-responsible investor Paul Herman on the movie’s impact and lessons. (more…)
Posted in Rebalancing, tagged Behavioral Finance, EBRI, Morningstar, portfolio rebalancing, rebalancing, Vanguard on September 23, 2010 | 2 Comments »
Individual investors don’t like to rebalance. According to Congressional testimony given by Dallas Salisbury, CEO of the Employee Benefits Research Institute and one of the nation’s leading experts on retirement and savings, more than 3/4 of all 401 (k) holders never make a change to their asset allocation or rebalance. Not once.
Work goes into setting your asset allocation and designing a portfolio that fits your risk tolerance. If that erodes as winners grow and the slow-pokes shrink, it’s certain that your final portfolio won’t look much like your design over time. (more…)
Posted in Behavioral Finance, Long-term investing, tagged Against the Gods, Behavior Gap, Behavioral Finance, Bucks Blog, Carl Richards, Manias Panics and Crashes, Morningstar, Prasada Capital, The Black Swan, The Myth of the Rational Markets, Winning The Loser's Game, Your Money or Your Life on September 21, 2010 | 1 Comment »
Carl Richards, founder of Prasada Capital and a weekly contributor to the New York Times’ Bucks blog, recently took some time out of a busy schedule to talk to Portfolioist. The topic: how investors can get a handle on their own investments. (more…)
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