I've recently been reading the fourth edition of Jim O'Shaughnessy's What Works on Wall Street. One of the topics covered early on by Jim is why statistically based models beat human forecasters. To summarize, it's all about our human inability to make emotionless...
When it comes to investing, risk tolerance is the amount of risk you're willing to take as an investor. We all have to take some degree of risk to enjoy any type of return. Different investors are comfortable with different levels of risk taking. Some advisors and...
So you've found an investment advisor you're potentially interested in working with, sounds great. What are the important questions you need to ask him or her before getting started? As an advisor, I know a few questions that investors absolutely need to ask....
What's your worst enemy when it comes to investing? Well, for starters the answer is a who, not a what. It's not Janet Yellen, President Obama, or Mario Draghi. You are your own worst enemy. That's right! Josh Brown of Ritholtz Wealth Management recently blogged over...
One of the most frequently quoted time periods in finance is the ambiguous "long term". We're all supposed to be long-term investors, and studies show that "over the long term" results will be desirable. This sounds nice, but what is this mythical "long term"? Is...
Keeping things in perspective is important. Investors fall victim to cognitive biases sometimes, but we can do our best to avoid that type of behavior. With the strong markets seen in 2012, 2013, and 2014, investors are primed for recency bias to cloud their...
On this week's Mullooly Asset Management podcast, Tom and Brendan discuss a cognitive bias known as the disposition effect. Cognitive biases such as the disposition effect, loss aversion, confirmation bias, and others can negatively affect investment performance. Tom...
Being consistent is a critical concept we must learn during life. Setting his recent and questionable financial advice aside, Tony Robbins has said that, "It's not what we do once in a while that shapes our lives. It's what we do consistently". This is 100% accurate....
Big differences in the stock market behavior depends on whether the backdrop is bullish or bearish. Take a look: If you are relying on a blog post for specific investment advice, you are making a huge mistake. Please speak with an investment adviser before...
