Guest blog by Daniel Solin, Mint.com. The evidence showing that most individual investors significantly underperform the market is compelling. A study done by Dalbar, a leading financial services market research firm, found that, during the 20 years from 1991 through 2010, the average stock fund investor earned returns of only 3.83% per year, while the [...]
Posts Tagged ‘Behavioral Finance’
Is Your Brain a Barrier to Smart Investing?
Posted in 401(k), Active Investing, Asset Allocation, Behavioral Finance, Books, Diversification, ETFs, Financial Advisors, financial planning, Income Investing, Investors, Long-term investing, Markets, Mutual Funds, Personalization, retirement income, Risk, Uncategorized, tagged asset allocation, Behavioral Finance, Daniel Kahneman, David Swensen, Fees, investing, management fees, mutual funds, rebalancing, retirement planning, volatility on January 5, 2012 | 1 Comment »
Just Put the Ball in Play
Posted in Active Investing, Investors, Long-term investing, Market Outlook, Market Timing, Markets, Personalization, Rebalancing, Regular Investing, retirement income, retirement planning, Risk, Stock Investing, Uncategorized, tagged asset allocation, Behavioral Finance, diversification, MoneyBall, recency bias on December 21, 2011 | 1 Comment »
Guest Blog by Robert P. Seawright, CIO, Madison Avenue Securities. On account of the success of Moneyball (both the book and the movie, nicely satirized here), baseball management is often compared to investment management, and with good reason. Moneyball focused on the 2002 season of the Oakland Athletics, a team with one of the smallest [...]
“A Little Late” by Carl Richards
Posted in Active Investing, Asset Allocation, Diversification, Financial Advisors, financial planning, Investors, Long-term investing, Low Cost Investing, Market Outlook, Market Timing, Markets, Portfolio Investing 101, Rebalancing, Regular Investing, Retirement, Risk, Stock Investing, Uncategorized, Volatility, Wealth, tagged Behavioral Finance, behaviorgap.com, Carl Richards, diversification, economy, market volatility, recession, stock market predictions, stock market rebound, Wall Street Journal on September 27, 2011 | 1 Comment »
Carl Richards’ is a favorite contributor here at the Portfolioist. We’ve interviewed him in the past (see, “How to Pick an Investment Advisor (Part 3): Carl Richards’ 3 Key Questions” by Nanette Byrnes) and remain a fan of his website, behaviorgap.com. Using a Sharpie and a piece of card stock, Richards captures complex financial ideas [...]
The Hidden Costs of Index Funds
Posted in Active Investing, Asset Allocation, Behavioral Finance, Bonds, Diversification, Income Investing, Investors, Leverage, Long-term investing, Low Cost Investing, Market Outlook, Market Timing, Markets, Mutual Funds, Rebalancing, Stock Investing, Uncategorized, Volatility, Wealth, tagged Antti Petajisto, Behavioral Finance, costs, hidden cost, index investing, market timing, S&P 500 Index on July 27, 2011 | 4 Comments »
While it is widely understood that index funds represent a low-cost way for investors to achieve broad diversification, a recently published research study sheds light on a “hidden cost” associated with investing in index funds. Antti Petajisto, a professor at NYU’s Stern School of Business, conducted the original research for “The Index Premium and its [...]
From the Portfolioist Book Shelf: Your Money Ratios by Charles Farrell
Posted in Active Investing, Asset Allocation, Behavioral Finance, body mass index, Books, Diversification, ETFs, Income Investing, Investors, Long-term investing, Low Cost Investing, Market Outlook, Market Timing, Markets, Personalization, Rebalancing, Regular Investing, Retirement, Stock Investing, Uncategorized, Volatility, tagged asset allocation, Behavioral Finance, BMI, Body Mass Index, bonds, book review, books, Charles Farrell, diversification, ETFs, financial planning, mortgages, volatility, Your Money Ratios: 8 Simple Tools for Financial Security on July 22, 2011 | 1 Comment »
I’m always on the lookout for great books on financial planning and investing. There are literally thousands of books on these two topics and that makes it hard for many people to figure out where to start. I recently read Your Money Ratios: 8 Simple Tools for Financial Security by Charles Farrell and think that [...]
Hedge Funds: The Emperor’s New Clothes?
Posted in Active Investing, Asset Allocation, Behavioral Finance, Diversification, Investors, Leverage, Long-term investing, Market Outlook, Market Timing, Markets, Regular Investing, Risk, Scams, Stock Investing, Uncategorized, Volatility, tagged Behavioral Finance, David Swensen, diversification, hedge fund investors, hedge funds, long term investing, marketwatch, Risk, stock investing, stocks, Yale on July 1, 2011 | 1 Comment »
Brett Arends recently wrote a piece for MarketWatch in which he expressed the opinion that hedge funds are a sucker’s bet. He bases his argument on a fascinating study called Higher Risk, Lower Returns: What Hedge Fund Investors Really Earn that was published in 2009. The authors of the study, professors from Emory University and Harvard, [...]
Do Performance Claims Really Add Up?
Posted in Active Investing, Asset Allocation, Behavioral Finance, Investors, Leverage, Long-term investing, Market Outlook, Market Timing, Markets, Retirement, Risk, Scams, Stock Investing, Uncategorized, Volatility, Wealth, tagged Behavioral Finance, diversification, Jason Zweig, Jim Cramer, long-term investing, performance, S&P 500 Index, stock investing, stock performance, stock scams, volatility, Wall Street Journal on June 22, 2011 | 1 Comment »
Jason Zweig, well-known author of “The Intelligent Investor” column at The Wall Street Journal, recently checked out the claims of market-beating performance in marketing materials from a range of market commentators. For example, Jim Cramer’s newsletter was reported by Zweig as stating that his stock picks generated returns more than twice the performance of the [...]
What you need to know before you invest in IPO’s
Posted in Active Investing, Asset Allocation, Behavioral Finance, Investors, Leverage, Long-term investing, Market Outlook, Market Timing, Markets, Risk, Stock Investing, Uncategorized, Volatility, Wealth, tagged asset allocation, Avaya, Behavioral Finance, flash crash, Groupon, GRPN, Income Investing, investing, IPO, IPOs, LNKD, long term investing, P, Pandora, Risk, stock investing, volatility, ZAGG, Zyngna on June 13, 2011 | 5 Comments »
I have not seen this type of brand name IPO trading volume for quite some time. From Groupon (GRPN) and Pandora (P) to Zynga (ZAGG) and now Avaya, the media would have you believe that investing in a brand name IPO is a quick fix for your portfolio. Take the recent public stock offering in [...]
The Wealth(y) Solution
Posted in Behavioral Finance, Portfolio Investing 101, Risk, tagged Behavioral Finance, Eric Goldberg, Loring Ward, Risk, The Wealth Solution on May 26, 2011 | 1 Comment »
When it comes to investing, it turns out that the rich are just like me and you, only with a few more zeros. They too worry about investment losses more than they appreciate gains. They too often let emotion hold sway over their investing decisions. So says Eric Golberg co-author of a new book called [...]
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