My blog provides valuable insights into Nobel Prize-winning financial strategies for investors. By utilizing decades of worldwide peer-reviewed capital markets research and analysis, I demonstrate how to build better investment portfolios with lower risks. I also examine common financial media misinformation and how investors can make better financial decisions.
Focusing on what you can control can lead to a better investment experience.
Whether you’ve been investing for decades or are just getting started, at some point on your investment journey you’ll likely ask yourself some of the questions below. Trying to answer these questions may be intimidating, but know that you’re not alone. Your financial advisor is here to help. While this is not intended to be an exhaustive list it will hopefully shed light on a few key principles, using data and reasoning, that may help improve investors’ odds of investment success in the long run.
1. What sort of competition do I face as an investor?
The market is an effective information-processing machine. Millions of market participants buy and sell securities every day and the real-time information they bring helps set prices. This means competition is stiff and trying to outguess market prices is difficult for anyone, even professional money managers (see question 2 for more on this).
This is good news for investors though. Rather than basing an investment strategy on trying to find securities that are priced “incorrectly,” investors can instead rely on the information in market prices to help build their portfolios (see question 5 for more on this).
Criminals can easily capture your credit and debit card information with small devices called skimmers. Don't fall victim to these insidious attacks!
By: Max Eddy PC Magazine, April 5, 2016
The moment I started seriously worrying about credit card and debit card skimmers wasn't when my entire bank account was transferred to Turkey, or when I had to get three credit cards in two months because of fraudulent charges. It was when I learned that stealing a credit card number is as easy as plugging in a magnetic strip reader into a computer and opening a word processor. Every swipe is read as a keyboard entry, with no extra setup required. More advanced devices to steal your information are installed by criminals directly on to ATMs and credit card readers. These are called skimmers, and if you're careful you can keep from being victimized by these insidious devices.
It will soon be the 10-year anniversary of when, in early October 2007, the S&P 500 Index hit what was its highest point before losing more than half its value over the next year and a half during the global financial crisis.
Over the coming weeks and months, as other anniversaries of major crisis-related events pass (for example, 10 years since the bank run on Northern Rock or 10 years since the collapse of Lehman Brothers), there will likely be a steady stream of retrospectives on what happened as well as opinions on how the environment today may be similar or different from the period leading up to the crisis. It is difficult to draw useful conclusions based on such observations; financial markets have a habit of behaving unpredictably in the short run. There are, however, important lessons that investors might be well-served to remember: Capital markets have rewarded investors over the long term, and having an investment approach you can stick with—especially during tough times—may better prepare you for the next crisis and its aftermath.
Numbers guide much of our daily lives. From the price of a gallon of gas to the cost of our morning coffee, numbers are solidly submerged in our collective consciousness. Numbers are absolute. Even though the cost of a gallon of milk may go up or go down, what the numbers involved mean stay static and absolute. Prices may fluctuate, but a dollar is still four quarters, ten dimes, twenty nickels or one hundred pennies (as unwieldy and impractical counting all of them out at the coffee shop cash register might be). Numbers are logical and predictable. Three times seven will always add up to twenty-one (a number that has much significance at the blackjack table and equal importance for college students looking to embrace their new-found adulthood with a pint or two at the local watering hole). Numbers are practical and unemotional. Numbers know no sympathy - just ask anyone who has ever gotten a costly ticket for exceeding a posted speed limit. Numbers are a lot of things but one thing they are certainly not: numbers are not people.
In the world of investment management, there is an oft-discussed idea that blindfolded monkeys throwing darts at pages of stock listings can select portfolios that will do just as well, if not better, than both the market and the average portfolio constructed by professional money managers. If this is true, why might it be the case?
As a parent and a financial advisor it has always been important to instill the value of financial knowledge and to encourage other parents to teach their children to understand the fundamentals of good financial decision making.
Unfortunately, lessons in money management can fall by the wayside and by the time kids are starting to make their own money choices they do not have the tools to avoid costly mistakes.
I think it is an enormous oversight that schools don’t even teach the basics such as how to pay bills or why interest rates matter. Sadly, we will not likely see a shift in the education system anytime soon so, it must be left up to parents and guardians to teach financial literacy to their children. Ultimately, it is you who will benefit from having a responsible grown up who doesn’t need to borrow money from you or live over the garage due to poor money choices.
Planning for retirement is a source of anxiety for many people. From the intricacies of the planning process to concerns about results, this time can be fraught with uncertainty. While many parts need to come together to make a cohesive and sustainable plan, the biggest fear most face is the fear of making mistakes.
Mistakes in a retirement plan can be costly in both time and money. While the monetary cost is the most easily visible, the cost in time – if retirement is close and there is scant time to make up lost ground – can also cause a fair amount of unease.
Although there is no absolute guarantee for a perfect, mistake free retirement plan, these mistakes – and their unintended consequences – can be minimized and managed--and, hopefully, bring about peace-of-mind during the retirement planning process. Here are some ideas for increasing inner harmony on the road to sound retirement planning.
Learning the jargon of financial investment can be daunting, but it can also provide you with a better way to understand the status of your investments. Here is a brief primer on some common financial terms you should know, and things you should consider when evaluating your portfolio and investment returns.
