How Should an Overvalued Market Affect Your Investment Plan?
Markets don’t move capriciously. They move because something new has happened – new information has arisen. The tricky part is that we don’t know what new information will arise.
What Happens After the Market Drops?
Staying disciplined and avoiding market timing are two of the best investing tips we could give whether the market is up or down, but what happens after the market drops?
Disciplined Investors Don’t Rely on Market Predictions
Authors Note: This article was originally published towards the end of January 2016. To put it mildly, the year got off to a rocky start, and a lot of people were incredibly nervous about what this meant for the markets. While this article specifically addressed the situation at the beginning of 2016, but with a […]
A Vanishing Value Premium?
Value stocks underperformed growth stocks by a material margin in the US last year. However, the magnitude and duration of the recent negative value premium are not unprecedented.
Can You Time the Market?
Over the long term, market returns need to be captured efficiently and consistently. Trying to guess when they occur is an impossibility that leads to the underperformance stated above. How difficult is it to time the market? Let’s look.
Prophets & Losses: Predicting the Market is a Losing Proposition
Right now there is a lot of noise in the system. The din of the pundits quickly becomes deafening as they try to tell you what the markets are going to do this year. The financial media does this every year, and even more so with this year’s volatile start. This type of prognostication sells, […]
Losing the Forest for the Trees: The Dangers of Comparative Investing
Some investors measure financial success by comparing their returns against popular benchmarks like the S&P 500 Index. It can be comforting to know how your investments compare to others … but there’s a catch. If you aren’t comparing your investments to similar investments, the results can misinform rather than enlighten your decision-making. This will knock […]
Black Monday Is Not a Black Swan
Last Monday, the S&P 500 dropped by more than 3.5%. This is a big drop, and has a lot of folks wondering if they should be invested in the market at all. It’s easy to get wrapped up in media coverage, and not keep last Monday in perspective. It was a bad day, but historically, […]
Total Return vs Income Investing: Same, but Different
Retirees can take 2 main approaches to spending from portfolios. 1) Focus on income and dividends produced in the portfolio, a.k.a. “income investing.” 2) Sell assets as appropriate to meet spending needs. For your portfolio, they’re basically the same thing. But, from your point of view, you should be aware of one difference: focusing on income investing can make your portfolio less diversified.
Withdrawal Sequencing: Avoiding the Pitfalls of Retirement Distribution Order
Taking retirement income from your investment portfolio in retirement is like walking through a minefield. Most people don’t think about it, but your distribution strategy in retirement – how you actually take money out of your portfolio – and the resulting taxes can have a significant impact on how long your money lasts and how much you’ll be able to spend throughout retirement.
