Election-night volatility led to wildly incorrect market forecasts, showing the folly of trading around major news events.
Volatile swings like those that followed Thursday night’s Brexit vote aren’t a call to action. They are a call for reason.
Saturday marks one year since stocks last hit a record high. Here is how to think about this.
Stocks’ recent upturn isn’t abnormal.
Stocks’ rally since February 11 is built on fundamental support, not sand.
We figure few investors bought stocks expecting flat returns, but after negativity some nevertheless fall prey to behavioral errors and sell at breakeven.
Waiting for a correction to buy stocks is a fruitless exercise.
Sideways markets are often frustrating, but stocks can move quickly—make sure you’re ready.
Beware forecasts that simply extrapolate the year’s start forward.
Discipline is still the key to investing success.
The media’s opinions on eurozone stocks run the gamut. What are investors to make of it all?
For long-term investors, upside market risk has forever been the most dangerous risk.
Everyone makes mistakes in their portfolio. The best investors embrace their foibles and learn from them.
Here is our not-exactly-annual guide to thinking about your portfolio as the Earth embarks on another trip around the sun.
What can investors take away from December's swings?
With volatility up, investors should be conscious of how their brains may blindside them.
It has been a bouncy start to October, but equity investors must focus on longer time periods than seven trading sessions.
Does it matter that stock ownership, by one measure, was at near-record lows 18 months ago?
How should investors prepare for a possible correction?
What should investors make of recent chatter that the “easy money” days of the bull market are done?
Index funds have many fine features, but they can’t help investors fight the biggest stumbling block to long-term success: emotion.
When headlines predict big short-term moves, long-term investors should stay cool.
China’s recent “fat finger” error may have investors concerned about flash movements, but their overall impact on performance is overstated.
As several popular indexes have surpassed their past peaks recently, market acrophobia—fear of heights—seems to have increased dramatically. But bull markets don’t share our earthbound proclivities.
Markets don’t move on Mayan calendars, astronomy or folklore—so we have a hard time seeing why they should move just because it’s May.
A new study shows behavioral pitfalls have hindered investors since the dawn of equity markets. How can we fight our emotions?
Investors attempting to wait out current market volatility are likely taking more risk than it’s worth.
Understanding and separating the negatives from the positive realities can help guide your investing decisions.
White-hot, fear-based rhetoric is flying around the debt ceiling as politicians try to sell their positions. And, some links.
A primary risk to investors is overemphasizing something old or wrong.
The very human tendency to fixate on negative events is a behavioral trait that doesn’t serve investors well.
May has arrived, and along with it, the often-repeated investing advice to sell and go away.
Economic growth and positive market returns continued in Q1 2011. But what of investor sentiment?
Year after year, crises come and go, and the market carries on.
Two events Friday highlight why investing based solely on what’s possible is wrong.
Investors should take a cue from stock markets and ignore when indexes hover at round number thresholds.
|Euro-jitters returned after an Irish debt downgrade—but a successful auction and generally healthier financial system show Europe's doing just fine. |
|Most Americans feel like their portfolios haven't grown over the last year. But feelings are often completely wrong. |
|Consumer confidence reminds us what the stock market already indicated and is not a good predictor for future stock returns.|
|In bad times, stocks are commonly shunned as permanently damaged goods—history shows no such thing.|
|Major holders of US government debt aren't about to abandon this important market. |
|What do you get when you combine the subprime mess with recent hedge fund debacles? An archetypal regret-shunning hootenanny! |
|Stocks have experienced some downward volatility of late. Times like these call for yogic breathing and maybe a little energy work. |
|The question of "correction” vs. "bear” is really a question of semantics.|
|Fears surrounding foreign governments' investments in US firms is unwarranted. Capital is capital—the freer it flows the better.|
|A look back at the top market stories of 2007.|
|Many of the market gurus have made their 2008 stock market predictions. Before making your own, we'd advise some critical thinking and skepticism.|
|There's nothing unusual or alarming about recent market volatility. Though we may not remember it this way, market volatility is normal and should be expected.|
|Those looking for the "odds” of a recession are barking up the wrong tree. Economies are not games of chance.|
|Investors dread decreasing home prices will translate to lower net worth and slower consumer spending. But the Federal Reserve's latest report on the US household reveals the largely unappreciated strength and vigor of the American consumer.|
|Folks seem to believe the US is headed for a recession. We'd bet most of those folks would fail our quiz.|
|Investors would be wise to abandon theories and stick to the facts when making portfolio decisions.|
|Acts of terrorism are vile, tragic and significant. But they've accomplished little in the way of decimating the free-market capitalist economies of the west, which today thrive at a near unprecedented pace six years after 9/11.|
|A recent survey shows folks fear an impending credit crunch more than the specter of terrorism. Meanwhile, T-bill rates are climbing back toward the Fed Funds rate—both very bullish signals.|
|When you were young, did you dream that one day you would grow up to be fairly normal? Maybe you really set your sights high and hoped to live an amazingly average life? No? We didn't think so.|
|All joking aside, a good sense of humor is vital for investing success.|
|New market highs trigger an instinctual, but potentially dangerous, reaction in investors—fear of heights.|
|Russia's attempt at revisionist history is a classic example of a common investor bias.|
|Stock market history features a litany of dangerous ideas and thinkers in the quest to know what others don't.|
|Well, here we are, midway through June.|
|Two brothers, ages ten and four, are killing time on a lazy Saturday afternoon.|
|More than awkward grammar and poor spelling, that odd phrase is (perhaps regrettably) a rapidly spreading meme.|
|Mind-bending doesn't begin to describe it.|
|These days there just isn't a lot of big news.|
|Most of life is fantasy.|
|Equity prices are ultimately determined by basic supply and demand.|
|The streak is over.|
"Facts are meaningless. You could use facts to prove anything that's even remotely true!" says Homer Simpson, one of our favorite sages. Rarely has such wisdom come from one so yellow and two-dimensional.
|Why are free market-based systems the optimal framework for an economy? One way to understand it is through the brain's evolutionary composition.|
|Have you noticed how quickly theories about the current market correction are being spawned then subsequently abandoned? We went from China, to the carry trade, to hedge funds, to the new "Daylight Savings Y2K", to subprime lending all in about two weeks.|
|"Whoso pulleth out this sword of this stone and anvil is rightwise king born of all England.|
|Do you know Abbey Joseph Cohen? How about Richard Bernstein? If you're an enthusiastic investor who follows the popular press, you probably do.|
- Over 100 million Americans drink coffee every day…that's over 36.5 billion cups in a year! At about 50 beans per cup, that's over 1,825,000,000,000 beans a year! At that rate, how could we possibly hope to re-grow enough beans for the next year's brew? It's too much of a strain!
|The mission of most investors is to find the best companies to put their money into.|
|Around here we always say "your brain can trick you.|
|Yesterday in this space we talked about framing and understanding how big big really is.|
|Is this a big number? $87,000,000,000 What about this one? $2,900,000,000,000 Are they both big? Is one big and the other bigger? Surely they couldn't be small! Ponder that for a moment…we'll get back to it.|
- What I cannot create, I do not understand.
- Science is a way of trying not to fool yourself. The first principle is that you must not fool yourself, and you are the easiest person to fool.
|Nobel prize-winning economist Daniel Kahneman is at it again.|
|If you're like most people, you're probably indulging in a bit of yearend introspection as 2007 approaches.|
|We have to live with ambiguity and discord every day.|
|We aren't going to wax political, or even philosophical, on income inequality or standard of living inequality in the world.|
|Sharon Begley's science column in today's Wall Street Journal is an insightful look into the psychological underpinnings of reckless teen behavior.|
|Fears are rising around the world over the purported testing of a nuclear weapon in North Korea.|
|Here we are in mid-September of 2006 and not a single hurricane has made landfall in the US.||
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