In 2013 the U.S. stock market had its best return in over 15 years.  When you reviewed your portfolio in January of 2014, did you add to your investment in U.S. stocks because they did so well the previous year?  If so, then you were guilty of what is called in the jargon of behavioral…
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It’s well understood that investment risk and returns go together.  Simply put, investors expect a premium, generally in the form of a higher return, for investing in higher-risk securities, where risk is quantified as return variability or volatility. This explains why over time stocks outperform bonds and why the returns on small company stocks are…
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Stocks are among the most volatile of the many types of publicly-traded investments available to the public.  Whether you invest in stocks directly or through mutual funds or exchange-traded funds (ETFs), you might feel more comfortable with your investments if you knew you could limit your losses in case the market or the particular company…
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Philosophically most investors fall into one of two camps when it comes to selecting mutual funds.  Some prefer actively managed funds while others have a preference for those that are passively managed.  What’s the difference?  According to Investopedia, active managers rely on analytical research, forecasts, and their own judgment and experience in making investment decisions…
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Among the numerous economic and financial indicators that investment advisors utilize in an attempt to predict future stock market performance there is a pretty broad consensus that company profit margins (or earnings per share) are one of the better predictors.  The challenge, of course, is the difficulty of predicting future profit margins.  Currently for the…
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The New York Times recently reported on research at USC suggesting that when under stress, men take more risks than women by focusing on bigger wins, even when they are costly and less likely. One experiment involved giving points for inflating digital balloons on a computer.  The trick was to pump them enough to maximum…
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