Dumb Investing Ideas
No wonder the average investor significantly underperforms market returns that are theirs for the taking. After all, the financial media and the securities industry inundate investors with a daily barrage of new products and misleading information. Here are some recent...
Almost Everything You Know About Investing Is Wrong
Many of you have some fundamental beliefs about the process of investing. These beliefs understandably guide your investing behavior. Unfortunately, they are often dead wrong. This is not surprising, because the financial media and the securities industry have a vested...
Heed Buffett & Ignore Forecasts
Earlier this week, we discussed the first six of a total 12 lessons that the markets taught us in 2014 about prudent investment strategies. To recap: Lesson 1: Active management is a loser’s game Lesson 2: The economy and the...
Exposure Offers Clarity in the Risky World of Investing
Last week, a conversation with a friend reminded me how easily we can confuse actual risk with our own exposure to that risk. My friend travels a lot for work, and I asked him where he planned to go this...
What are the risks of alternative yield-seeking strategies?
Q: What are the risks of alternative yield-seeking strategies? A: Replacing a portion of your high-quality bond or bond mutual fund holdings with strategies ranging from high-dividend stocks to oil-and-gas master limited partnerships because “rates are low” involves taking on...
A Powerful Force Is Killing Your Retirement
Investment “professionals” could be killing your chances of retiring with dignity, if at all. This extract, from one of America’s most respected financial journalists, William Bernstein, should be read and reread by every investor: “There are two kinds of investors,...
Hedge Funds Flop. Again.
Today marks the final installment in my series addressing the lessons that the markets taught us last year about prudent investment strategies. As we noted previously, 2014 provided us with a total of 12. You may have observed by now...
The Wonderful Thing That Happens When a Financial Adviser Tells You the Truth
A tale of youthful stupidity holds the key to giving honest, genuine financial advice. The most important event in my life is one of which I was long ashamed. I was an 18-year-old punk with a monumental chip on my...
Plan Sponsors’ Weak Returns
Institutional plan sponsors are charged with investing trillions of dollars on behalf of pension plans, endowments and foundations. As a result, the quality of the investment decisions made by these plan sponsors is of great interest and importance to a...
Recency Bias Damages Returns
One of the more common and costly investing mistakes that individuals tend to make involves the behavior known as “recency,” which can be described as the bias toward overweighting recent events or trends, and ignoring long-term evidence. Recency leads investors...
