Prudent Portfolio Management

October 22, 2010

Many investors understand the need for portfolio management. Unfortunately, most investment professionals work very hard to make their portfolio management extremely confusing. They have a vested interest in creating investor confusion. They use jargon designed to intimidate you and make it difficult for you to understand. But portfolio management is actually not that complicated if [...]

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Investors Navigating Structured Products

October 5, 2010

In recent years, structured products have gained favor among retail investors in Europe and the US. Investment banks promote these securities as sophisticated tools to help investors manage downside risk, enhance returns, or achieve other investment objectives. Sales have grown briskly since 2006, and despite a decline after the 2008 market crisis, some industry sources [...]

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Stock Market Crises

July 15, 2010

It’s been said that we can count on death and taxes. We should also add “market crises” to the list. It seems like the stock market is always either in a crisis, recovering from a crisis, or anticipating the next crisis. Indeed, we’ve experienced numerous “crises” over the past four decades including the following:

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Market Volatility in Perspective

June 23, 2010

The US stock market has taken investors on a bumpy ride in recent years. Market volatility has tested investor discipline and prompted some people to question their commitment to equities. While no one knows the future, looking at the past may help you gain a better view of long-term market performance and put the recent [...]

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Can Active Investment Managers Consistently Beat the Market?

June 16, 2010

Proponents of active investment management believe that skilled managers can outperform the financial markets through security selection, market timing, and other efforts based on prediction. While the promise of above-market returns is alluring, investors must face the reality that as a group, US-based active investment managers do not consistently deliver on this promise, according to [...]

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Human Emotions and Successful Investing

March 18, 2010

Human emotion is an important factor in successful investing. Would it surprise you to know that the worst stocks during the bear market that ran from October 9, 2007 to March 9, 2009 turned out to be–by far–the best performing stocks over the next 12 months?

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The Resilient Investor: Consumer Sentiment

February 17, 2010

The Reuters/University of Michigan consumer sentiment preliminary index for February that was reported last week declined slightly from the late January number and it was lower than expected as consumers continued to fret over unemployment. The index is now down 24% from January 2007, according to data from the St. Louis Federal Reserve. Ironically, when [...]

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Best Mutual Fund of the Decade: CGM Focus

February 3, 2010

The financial media is pleased to report that the best performing mutual fund of the decade is Ken Heebner’s CGM Focus fund. Through the end of January, 2010, the mutual fund annualized 18.03%, easily outpacing the S&P 500’s annualized return of -0.55%. Did you miss these returns? Not to worry, because the typical investor in [...]

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Ten Stock Investments for the Next Decade

January 27, 2010

With the dawn of a new decade arrives the financial media’s recommended investments. Articles with attention grabbing titles such as “10 Stock Investments for the Next Ten Years” entice readers with promises of market beating returns. But should you follow media’s investment recommendations? Consider the following articles published ten years ago.

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Investing: The Difference Between Luck and Skill

December 29, 2009

There is a difference between luck and skill and knowing when you are just lucky and when you are successful due to skill is of paramount importance as an investor. For instance, let’s say you correctly called the flip of a coin five times in a row. What are the odds that you will correctly [...]

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