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Volatility Is A Drag

I mean that quite literally. Volatility causes a drag effect on investment returns. And although modern portfolio theory teaches that investments with expected higher returns generally have higher volatility, volatility itself always negatively impacts returns. This is not a theory but a mathematical fact that can easily be demonstrated. Let’s take a hypothetical example. You’ve…
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Are Leveraged ETF’s Good For Your Financial Health?

In today’s blog we explore the world of leveraged ETFs. For those of you who are not familiar with ETFs (Exchange-Traded Funds), they are mutual funds that are bought and sold like stocks. The majority of ETFs are passively managed and based on some index, allowing the investor to purchase a single fund that represents…
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Would You Save More If You Knew How Much It Would Be Worth?

Two recent studies, one at the National Bureau of Economic Research (NBER) and the other at The Center for Retirement Research at Boston College, found that when people are better informed about what their savings will be worth in the future, they save more.  Although both studies focused on younger savers, the results suggest that…
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Four Tips For Avoiding Being Ripped Off By Your Financial Adviser

By now everyone has heard of Bernie Madoff and his $50 billion (with a ‘B!’) investment scam. Unfortunately, although his scam was by far the biggest ever uncovered, he was hardly alone. There’s Roberto Heckscher, who allegedly bilked $50 million from mostly elderly investors over a thirty-year period. And, more recently, Kenneth Starr, a New…
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Donating to Charity? Here’s How to Ensure Getting a Tax Deduction

Are you planning to make a donation to a charity this year? If so, you may be able to take a deduction for it on your 2012 tax return. Here are the top 10 things the IRS wants every taxpayer to know before deducting charitable donations. 1. Charitable contributions must be made to qualified organizations…
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Are Financial Planners Only For Risk Takers?

A recent article by Jason Zweig in the Wall Street Journal, based on an analysis of data from the Federal Reserve’s Survey of Consumer Finances by Sherman Hanna of Ohio State University, noted that 25% of U.S. households currently use a financial planner, up from 21% in the late 1990s. The bad news is that…
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