With the broader markets retracting much of their declines from early 2016, many investors find themselves letting out a sigh of relief and stepping back from the closer look they would have taken at their holdings had things continued heading south. The wise investor, however, will do the reverse. Today, when markets appear relatively stable,…
“To get to the magic part of the climb, it’s going to hurt. That’s normal. Your legs should be feeling pain right now. Just keep going.” So said my Revocycle instructor during a recent freewheel spinning class. My legs were indeed burning. But I didn’t change tactics or give up; I just kept pedaling steadily….
As markets start off the new year with a global slide in prices, you may want to re-acquaint yourself with a concept often found in standard introductory courses on economics–the difference between systematic and nonsystematic risk. Your retirement assets could depend on it. While those words may sound like a bunch of financial mumbo jumbo,…
Suppose you had a friend whose lifelong dream was to travel overseas. But this friend was deathly afraid of experiencing turbulence on an airplane. So he decided to forgo his trip until a new plane was invented, one able to guarantee with absolute certainty that passengers would never feel turbulence. You might be thinking, “Good…
How did you spend August 2015? Take a moment to really think about this question, as it can have serious implications for your portfolio in 2016 and beyond. As you may recall, this was the month we were all reminded about what “volatility” means. As the markets reacted to a devaluated yuan and plunging oil…
For most people the “B-Word” (budgeting) conjures up feelings of deprivation and self-denial. As such, when it comes to deciding how to allocate your hard-earned cash, I far prefer a concept I call “joy-based spending” to traditional budgeting. Here’s how it works. Instead of telling yourself all the things you shouldn’t spend money on, you…
I think just about the worst financial advice you can give to a recent college graduate is: “Buy stocks in companies whose products and services you like.” On the surface, advice to “buy what you know” is well-intentioned. After all, saving and investing early and often helps a young investor harness the amazing power of…
The Federal Reserve has signaled that interest rates will eventually rise. It may be tempting to conclude that, with diligence and perseverance, you could uncover a way to profit from this knowledge. If you find yourself enticed by this possibility, the question you need to ask is, “What do I know about what the Fed…
When choosing a fund manager, there are a wide variety of characteristics an investor can evaluate. Common points of assessment include: Educational background: What degrees has the fund manager earned, and from what schools? Is the fund manager a certified financial adviser (CFA)? Professional experience: Does the portfolio manager have previous experience on the research…
With the MSCI Emerging Markets Index up nearly 10% year-to-date through May 1, I think many people are wondering whether this area is the most attractive for investors seeking international exposure. Alas, history has taught us time and again that simply chasing the financial version of a “shiny new object” (recent performance, for example) is…
During my first 15 years as a professional investor, I fully believed it was possible to identify individual securities through fundamental research that would outperform the market. That commitment to seeking alpha is the one investment decision I would most like to redo. As the result of my choice to employ an active approach, the…
As it has been so frequently noted in the financial press, last year the U.S. dollar appreciated significantly against most foreign currencies, including the widely quoted benchmark euro. For investors with a portion of their portfolio in unhedged international stocks, this caused some short-term pain. For illustrative purposes, let’s expand the discussion beyond the euro…
During the years I worked as a buy-side equity analyst and an institutional portfolio manager, the first item I would always examine in an earnings report were the footnotes. That’s where all the truly juicy information appeared, and it never ceased to amaze me how many folks skipped right over them in the go-go-go days…
When I look back at the courses in high school and college that were most influential in my financial life, it’s a dead-even heat between economics (expected, right?) and English (whoa, come again?). At Wellesley College, there is an iconic economics course taught by Prof. Joe Joyce on capital markets. In this class, students are…