One of the many pitfalls to investing is chasing performance. Investors generally gravitate towards funds that have done well in the recent past. But how likely are they to do well in the future? The most recent S&P Persistence Scorecard sheds some light on this question.
An old quote from an old favorite: Benjamin Graham's "The Intelligent Investor."
Being aware of how you feel about money can help you recognize destructive behavior before action is taken. A new study by Brad Klontz suggests that there are generally four "money scripts" (ways you feel about money). Which are you?
There are primarily two factors which determine how much wealth you will have by the time you reach your golden years: your savings rate and your return. All accumulators should be aware of their savings rate and the implications of small changes. Here is a link to a calculator which shows just that:
In marriage, we often split responsibilities rather than share them - handling the household finances is no exception.
Here's a great video from David Booth, CEO of DImensional Fund Advisors, about long-term discipline and current market sentiment.
It's that time of year when many of us think about establishing one or more New Year's resolutions. This often means committing to improving one's lifestyle by losing weight, exercising more, or drinking less. Some investors could probably benefit from resolutions targeting their financial health as well. Just as many individuals endanger their well-being with bad habits, numerous investors suffer from ill-advised practices that are detrimental to their wealth. Perhaps a set of New Year's investment resolutions, along with an advisor capable of helping investors adhere to them, will lead to a more prosperous future.
The 2008 global market crisis and the struggling economy have left many investors fatigued. Despite two years of strong equity returns, some investors have been slow to regain market confidence. Many are accepting the talk about a “new normal” in which stocks offer lower returns in the future.1
Robert Brokamp, author of the "Motley Fool Rule Your Retirement" Newsletter, wrote a great article illustrating a Financial Pyramid as a guide to financial well-being.
Good Morningstar article about fee-based v. fee-only advisors: