Does Past Performance Matter?
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.
Resolutions To Make You Wealthier This Year
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.
What's "New" about a New Normal?
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
Economic Growth and Market Performance
Economic growth and stock market performance are not related. The market is a great equalizer.
Father of Modern Finance Weighs In
Eugene Fama, Professor of Finance at the University of Chicago, was internviewd about the recent financial crisis, capitalism, efficent markets and financial regulatory reform. The video is worth watching to get past the hype and back to the basics.
Money Madness
Similar to many of you, I watched with amazement as Northern Iowa beat Kansas in the men's NCAA basketball tournament. Kansas was favored to win the entire tournament. The last time Northern Iowa made it past the second round was in 1990. Farther east, 12th seeded Cornell upset 4th seeded Wisconsin to move onto the Sweet 16. Cornell had yet to win a tournament game before this year. As of March 19th, there were 4.8 million brackets submitted to ESPN. After the first day of the tournament, only 56 were correct. There were so many upsets that only .001% of participants were correct. And that was just after the first day.
Curtain Call
Is the Opera on Wall Street drawing near to the Final Curtain? Last year Wall Street grabbed many of the headlines and it wasn't pretty. All the while, investors have been drifting away toward independent advisors. With increasing focus on objective investment advice, Wall Street seems to be losing out. Read more in Wealthy Investors Weary of Wallstreet
What Should Investors Do Now?
Weston Wellington of Dimensional Fund Advisors (http://www.dfaus.com/) puts the current financial crisis into perspective with his six part series of videos, “What Should investors Do Now?” (http://www.dfaus.com/share/whatshou/). His use of historical materials and articles are both interesting and essential to understanding the psychology of investing.