I was in my early 30s and finally managed to scrape enough money together to start investing. I picked a high-flying mutual fund offered by a popular asset manager at the time. For a while, it made me
Continue reading...C’mon, admit it… Even if you’re super savvy financially, I’m sure you’ve occasionally bought a lottery ticket (or several). I know I have, when the jackpot is so astronomically high that it more
Continue reading...Decades of tracking and analyzing investment portfolio returns keep telling the same story., market timing behaviors are traps. Even though we should know it was just dumb luck, can we get a round of applause
Continue reading...We’ll wrap our series, the ABCs of Behavioral Biases, by repeating our initial premise: Your own behavioral biases are often the greatest threat to your financial well-being. We hope we’ve demonstrated
Continue reading...We’re coming in for a landing on our alphabetic run-down of behavioral biases. Today, we’ll present the final line-up: sunk cost fallacy and tracking error regret. Sunk Cost Fallacy What is it? Sunk
Continue reading...So many financial behavioral biases, so little time! Today, let’s take a few minutes to cover our next batch of biases: overconfidence, pattern recognition, and recency. Overconfidence What is it? No
Continue reading...There are so many investment-impacting behavioral biases, we could probably identify at least one for nearly every letter of the alphabet. Today, we’ll continue with the most significant ones by looking
Continue reading...Welcome back to our “ABCs of Behavioral Biases.” Today, we’ll get started by introducing you to four self-inflicted biases that knock a number of investors off-course: anchoring, blind spot, confirmation,
Continue reading...By now, you’ve probably heard the news: Your own behavioral biases are often the greatest threat to your financial well-being. As investors, we leap before we look. We stay when we should go. We cringe
Continue reading...We wrap our 10-part series on the principles of evidence-based investing with how a fiduciary financial advisor can add value to your investment portfolio management. Most importantly, by combining financial
Continue reading...Investment discipline is all about being able to see past the daily market distractions to maintain a long-term perspective. A big challenge here is knowing how to identify and ignore your own emotional
Continue reading...Many people struggle with emotional investing. That is, they find it difficult to make consistent, rational investment decisions, instead of reacting to current market conditions out of fear, excitement,
Continue reading...Why buy and hold a globally diversified portfolio instead of reacting to breaking news? Political, social, and economic headlines come and go. But you never know which market segments will outperform from
Continue reading...Holding securities across many market segments, expanding your investment universe, can help manage overall risk. But diversifying within your home market may not be enough. Global diversification can
Continue reading...There is a wealth of academic research into what really drives higher expected returns. Simply put, expected returns = current market prices + expected future cash flows. Investors can use this basic equation
Continue reading...Attending to how markets work is important for you and your investment portfolio. Should you buy, sell, or hold tight? Before the news tempts you to jump into or flee from breaking trends, it’s critical
Continue reading...Some investors select mutual funds based on their past performance. Yet, past returns offer little insight into a fund’s future returns. For example, most funds in the top quartile (25%) of previous
Continue reading...Wouldn’t it be great to hold only top selections in your investment portfolio, with no disappointments to detract from your success? Of course it would. It would also be nice to hold a $100 million winning
Continue reading...Market pricing is about you, the market, and the prices you pay. When it comes to investing it helps to know what you’re facing. In this case, that’s “the market.” How do you achieve every investor’s
Continue reading...After taking a closer look at interest rates and inflation we come to the heart of the matter: When interest rates, inflation, or both are on the rise, what’s an investor to do?
Continue reading...Inflation is the rate at which money loses its purchasing power over time. As you might guess, there are many ways to measure such a squishy figure. There are various economic sectors, such as energy,
Continue reading...At its March 15–16 Federal Open Market Committee (FOMC) meeting, the U.S. Federal Reserve raised its federal target funds rate by a quarter-point. It was the first increase since December 2018, but it
Continue reading...Despite our fervent hopes that Ukraine’s sovereign rights would prevail over tyrannical aggression, it’s now clear that Vladimir Putin has doubled down on the latter.
Continue reading...The recent conflict between Russia and Ukraine is an important reminder that geopolitical risk is a part of investing in global markets. Navigating geopolitical events requires expertise and flexibility.
Continue reading...The underperformance of small caps in 2021 was driven by poor returns of small growth companies with low profits. These companies have underperformed historically. An approach that excludes small growth
Continue reading...Since 1926, the US stock market has rewarded investors with an average annual return of about 10% – the market’s long term average. But it’s important to remember that returns in any given year
Continue reading...Capturing the size, value, and profitability premiums in real-world portfolios requires expertise. Investors should be cautious about favoring one premium over another or one region over another based
Continue reading...Have you been reading the daily headlines—watching markets stall, recover, and dip once again? If so, you may be wondering whether there’s anything you can do to avoid the motion sickness.
Continue reading...It was a year of uncertainty and anticipation, of hopes for a return to a degree of normalcy following the onset of the COVID-19 pandemic in 2020. And it was a year that showed, again, the difficulty of
Continue reading...This is no surprise. The world is enormous. To cope with information overload, we engage in what behavioral psychologists refer to as heuristics. These are rules of thumb or mental shortcuts that take
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