One of the secrets to being a successful investor is the ability to keep your head during a bear market while everyone else around you is losing theirs. To do that, you have to understand that bad news doesn’t necessarily mean stock prices will fall. While this may sound strange, it’s important to understand that…
Neal Merbaum Meet Ben, the CEO of a fictional company. One day, he calls his employees into a conference room for a meeting and starts to assign tasks. “Mark, start typing a letter. Marge, create a spreadsheet. Frank, organize a team.” And so on. But Ben doesn’t tell anyone why they’re doing these things or…
One of the more persistent investment myths is that it is a winning strategy to sell stocks in May and then wait to buy back into the market around November. The oft-repeated catch phrase is, “Sell in May and go away.” Well, this year if you sold your stocks in May, you would probably have…
Larry Swedroe Most investors are well aware of the SEC’s warning that past performance isn’t an indicator of future performance. That warning often leads to questions like: “If past performance isn’t predictive, why do you believe that the past outperformance of value stocks over growth stocks and small stocks over large stocks is predictive?” The…
By Thomas J. Emmerling and Jared Kizer Much has been written about the risks that rising interest rates pose to fixed income portfolios. However, much of this analysis has been simplistic or focused on historical periods, which are of little relevance in today’s environment of ultra-low nominal rates. On the simplistic side, market commentary has…
By Jared Kizer The financial media are full of conjecture about which strategies might effectively hedge inflation risk or not. Here we explore which asset classes, if any, have been effective at protecting against inflation risk. First, it is helpful to address some common logical and analytical misconceptions about hedging inflation risk. Focus on Correlation,…
An overwhelming body of evidence shows that actively managed mutual funds underperform their appropriate risk-adjusted benchmarks. In addition, little to no evidence points to persistence of performance beyond the randomly expected, which means past performance isn’t prologue. That’s the reason for one of the great puzzles in finance: Why do investors continue with such great…
Carl Richards, director of investor education for the BAM ALLIANCE, explains in his book The Behavior Gap on the difference between financial planning and life planning: “I spend a lot of time talking and writing about worst-case scenarios: investors behaving badly, people losing their retirement, and so on. But let’s not forget why we’re so…
A recent Northwest Mutual study shows a connection between being a disciplined financial planner and being happy in retirement. The study shows that highly disciplined planners — those who know their goals, have detailed plans to meet them and don’t deviate from those plans — are more likely than non-planners to say they are “happy…
Dan Solin is a New York Times best-selling author of the Smartest series of books. The following excerpt from his latest book, The Smartest Sales Book You’ll Ever Read, shows how you have the power to increase your level of happiness. Do you really have the power to increase your happiness? Experts say yes. Sonja…
Q: What are the benefits of buying higher coupon bonds? A: A higher coupon or “premium” bond has a higher coupon rate than the current market interest rate and will trade above par. These bonds sell for more than 100 percent of their par value, so the dollar value is greater than the normal $1,000….
Q: What are the benefits of buying higher coupon bonds? A: A higher coupon or “premium” bond has a higher coupon rate than the current market interest rate and will trade above par. These bonds sell for more than 100 percent of their par value, so the dollar value is greater than the normal $1,000….
by Brad Jenkins Life is hectic. Dealing with jobs, friends, family, and everything else you have on your plate contributes to that rapid pace. When you add children to the mix, it doesn’t get any easier. At some point, we run out of time to accomplish everything on our to-do list. Eventually, every one of…
When it comes to vacation planning, many vacationers tend to forget the planning part. Carl Richards, director of investor education for the BAM ALLIANCE, writes the “Sketch Guy” column for The New York Times. He offers a two-step process for planning for not only your vacation but for your happier vacation: “First, pick your trip,…
Overview: A typical vacation planning checklist is bound to include the usual considerations: booking a rental car, making hotel reservations and testing how much can really fit into that carry-on luggage. But not as many travelers consider what they would do if a health crisis were to occur on their trip. Following is advice on…