Learning Center

What are the risks of alternative yield-seeking strategies?

Date09 Feb 2015

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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 substantially more risk. A more efficient way to increase your level of risk is to...

A Powerful Force Is Killing Your Retirement

Date09 Feb 2015

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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, be they large or small: those who don’t know where the market is headed, and...

Hedge Funds Flop. Again.

Date09 Feb 2015

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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 that many of these same lessons show up year after year. And many times, the...

The Wonderful Thing That Happens When a Financial Adviser Tells You the Truth

Date09 Feb 2015

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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 shoulder. You know, the kind of kid certain of his indestructability, sure of his immunity...

Plan Sponsors’ Weak Returns

Date09 Feb 2015

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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 great many people. Over the years, I’ve met with many institutional plan sponsors to discuss...

Recency Bias Damages Returns

Date09 Feb 2015

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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 to buy after periods of strong performance (high) and sell after periods of poor performance...

Last Year’s Financial Predictions

Date02 Feb 2015

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At the start of each year, I compile a list of predictions that financial gurus and industry experts tell us are a “sure thing.” And each year, I track how many of these predictions actually come true. This marks our fourth and final quarterly review of some consensus financial predictions that pundits in the financial...

Investing Facts You Probably Don’t Know

Date02 Feb 2015

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Intelligent and responsible investing can be simple and uncomplicated. It involves buying a globally diversified portfolio of low management fee index funds, exchange-traded funds (ETFs) or passively managed funds in an appropriate asset allocation. After the initial purchase, there is very little to do except rebalancing perhaps once or twice a year and tax-loss harvesting...

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