If you watch the news you have probably heard a lot about dollar depreciation these last few months. As part of the economic stimulus package, the Federal Reserve has had to keep interest rates at historic lows (thereby making the “price” of dollars very cheap) while borrowing enormous quantities of money from foreign and domestic [...]
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The announcements of economic indicators like the Consumer Confidence Index and Personal Income were blamed for market ups and downs in the past week. Economists at large institutional investment firms such as hedge funds keenly watch these indicators and act upon them. Indicators are very important data to them because they act as guideposts in [...]
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Lately, it seems like even stock brokers are getting into the holiday spirit because like a retailer, they are having their version of a sales event in all those sign up bonuses.
TradeKing is giving everyone who signs up through a special link $50 if they fund their account with $2,500 and make at least one [...]
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If you have ever received advice on investing your money, chances are you’ve had the benefits of diversification drilled into your brain. “Diversify and rule” was my college economics professor’s one-line strategy for managing his retirement portfolio. Corny but true. The virtues of diversifying your investments have been borne out by mathematics, finance and plain [...]
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After deciding how much of your portfolio should be in each asset class (stocks, bonds, commodities, etc.), the next asset allocation decision to make is how much of your portfolio should be invested in your own country’s stock market and how much should be invested abroad.
Weighting by market capitalization
A common sense starting point would be [...]
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There’s one question that I’ve seen asked more times than any other over the last several months: “Should I keep investing in the market given how much it’s going down right now?”
To me, this question suggests a fundamental misunderstanding. The market isn’t “going down.” A more precise way to explain the situation is to say [...]
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The impact of investment costs is never emphasized enough. In order to see how much it affects mutual funds returns, let’s compare a few different domestic stock mutual funds:
Fund A: Vanguard’s Total Stock Market Index charges no sales load and has an annual expense ratio of 0.15%.
Fund B: American Funds’ Investment Company of America charges [...]
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As our economy and stock market tanked over the last several months, talk of inflation seemed to disappear. Instead, people began discussing the possibility (and ramifications) of deflation. Now that the stock market has picked back up–at least for the moment–I’ve heard several people voice concerns about inflation again.
Over an investor’s lifetime, inflation takes a [...]
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This is part one of a guest post series from Monevator, a personal blog that provides money tips and motivation for private investors. You can find:
part two – Ignore Your Portfolio for Months at a Time
part three – Why you Should Invest When the Market is Falling
Stock market volatility scares many people off [...]
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“Thoughtful chartists admit that continued success is dependent upon keeping the successful method known to only a few people.” -Benjamin Graham in Security Analysis
In other words, if somebody knew a surefire way to beat the market, he wouldn’t tell you. The reasoning is simple: The more people there are following a given strategy, the less [...]
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This is a guest post from Neal Frankle, a CFP who also writes at the Wealth Pilgrim.
“How do I rebalance my portfolio in this crazy market?”
That was a question I received recently in a long email from James. He explained that he was a “moderate” investor. He had a good mix of assets in bonds [...]
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The idea that stocks provide fairly predictable long-term returns is one of those fundamental beliefs upon which practically the entire investment industry is based. Lately however, I’ve seen a lot of people questioning the validity of that assumption.
And I can’t blame them. Having your portfolio decline in value by 40% in one year doesn’t exactly [...]
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My Friend Mike is huge supporter of index funds and he is kind enough to start posting here on a semi-regular schedule about investing. Find out more about him at the end of the article and let him know what you think.
I often find myself pondering why actively-managed funds even exist anymore.
From the 1940s [...]
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This is a guest post from Neal Frankle, CFP, who regularly contributes to this blog on investment subjects.
Eventually the market is going to turn around. Your funds will start going up in value. But my guess is, even then, you’ll find it hard to stay motivated about investing.
The world is going to call you a [...]
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