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It can be hard to hear that the best course of action during tough market times may be to do nothing. It can be even harder to hear that same message over and over as things seem to get worse. But it is a message we would not repeat if we did not truly...
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The massive downturn in the market in 2008 provided active managers and stock forecasters several opportunities to demonstrate their value. The following shows that even with a low bar set for outperformance, they had a difficult time meeting the challenge...
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The significant amount of stimulus being injected into the economy may have investors wondering what this will mean for inflation. The following discusses why inflation fears may be premature. _________________________________________________________...
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When difficult periods of market activity arrive, they remind investors of the importance of a disciplined approach to investing. The following discusses some of the lessons recently reinforced. Whenever a market crisis enters the picture, investors can...
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When the market experiences significant swings, some investors may be tempted to try to time the market in an effort to boost returns. The following explains why it is extremely difficult, if not impossible, to enhance returns through market timing efforts...
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Investors seeking shelter from the current market storm may be tempted to try to bet on the next winning investment sector. The following discusses why such a strategy may not be in investors' best interests. ___________________________________________________...
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Overview: Diversification has proven to be a winning strategy for most investors, who believe that it will protect them in all bear markets. However, the recent market volatility has shown that is not the case. The following discusses how investors should...
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Overview: Every year, Larry Swedroe takes a look back at the investing lessons the markets provided in the past year. Market conditions in 2008 certainly provided a challenge for investors, and there are many lessons that can be gleaned from the past...
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Overview: Investors around the country and around the world may have experienced some panic when the scandal involving Bernard Madoff - described as a $50 billion Ponzi scheme - became known. Some investors may be wondering if their assets may fall prey...
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You are a wine connoisseur. You purchase a case of a new release at $10 per bottle and store the wine in your cellar. Ten years later, the wine is selling for $200 per bottle. Do you buy more, sell your stock or drink it? Faced with this decision, few...
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Diversification is critical to prudent investing because it reduces risk. To be effective, diversification must be across assets that have low correlation. Real estate has low correlation with other asset classes and thus is an effective diversifier that...
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Behavioral finance studies have found that the average individual tends to be risk-averse. For example, behavioralists have found that to entice average people to accept placing bets, odds need to be in their favor. Similarly, the field of behavioral...
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A variable annuity (VA) is a mutual fund-type account wrapped inside an insurance policy. According to one estimate, by 2005, VAs outstanding exceeded $1 trillion. The abundance of VA sales is not a result of the demand. Instead, it seems mostly the result...
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Overview: What is the generally accepted order by which an investor should make tax-efficient withdrawals for retirement? With a focus on asset location, this article introduces several points for investors to consider when building their own prudent...
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Overview: Following is a discussion of the benefits of diversifying an individual municipal bond portfolio geographically instead of only purchasing municipal bonds issued within your home state. The main advantage of geographic diversification is that...