Historically speaking, recessions have been bad for stocks. One way to “catch a glimpse” of whether the economy is nearing a recession is to follow the index of Leading Economic Indicators. Examples of “leading” indicators would be: Jobless claims, Wage growth (or a lack of wage growth), What are purchasing managers doing, How is consumer confidence? Thanks… [Read More] Is the Index of Leading Economic Indicators Useful?
We believe that an investor's behavior can seriously impact their market returns. This category page is dedicated to informing our readers of certain behaviors that are known to damage investor's returns over time. We also discuss strategies to avoiding these damaging behaviors.
What’s in a name? For a lot of businesses, the actual name of the business is not what is most important. What did ‘google’ mean before there was Google? ‘Amazon’ was just the name of a rainforest before Jeff Bezos turned it into the behemoth it is today. ‘Facebook’ would just be two nouns put… [Read More] The Financial Therapist
Risk management is a topic we hear a lot about when it comes to investing. Its popularity tends to ebb and flow based on recent market performance. This seems intuitive to me because when the risk we’re trying to manage doesn’t occur, risk management often looks like a sunk cost. Conversely, when a risk we… [Read More] Risk Management vs. Return Management
What makes the buy and hold strategy so difficult for investors? There are plenty of articles written about this subject. You can read about it here, here and here. To sum it up, not many people can withstand the short-term pain for the long-term benefit. But what if part of the problem with the buy and hold… [Read More] Practicing Patience
Discolored surf, choppy water, a break in the wave pattern – these attributes signal one of the most dangerous aspects of visiting the beach: rip currents. The United States Lifesaving Association estimates roughly 100 drownings and over 80% of rescues performed by guards each year are the result of rip currents. Rip currents can form… [Read More] When Doing Nothing Means Everything
News (or noise) can be difficult to separate from facts (or signals). As an industry, Wall Street is LOUSY at communicating. Look at this headline from Marketwatch last evening: ? Why investors should dread the month of May—especially this year Published: Apr 30, 2018 4:46 p.m. ET Question: if you are an INVESTOR, why in… [Read More] Signal versus Noise