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How Poor Decision-Making Affects Your Returns

US News

We tend to think in the short term, but it hampers our ability to invest intelligently. In order to invest successfully, you need to be skilled at decision-making. This is true if you are a do-it-yourself investor or if you rely on recommendations from your financial advisor. The many decisions you must confront include whether…

Your Brain Is Rigged to Panic in the Next Correction

US News

Your emotions are your portfolio’s worst enemy, more so than an actual market correction. By now, you’re no doubt familiar with the claim by author Michael Lewis in his book, “Flash Boys.” Lewis believes high-frequency traders have rigged the stock market, causing harm to Main Street investors. Many respected financial commentators disagree. They believe high-frequency…

Report Says Ads Show Illusion of Fiduciary Duty

US News

Don’t be fooled. Advertisements can mislead investors on advisors’ responsibilities to clients. It’s funny that there’s even a “debate” over whether brokers should be required to act in the best interest of their clients. It’s even more nonsensical that many investment advisors to retirement plans don’t have this obligation. Much has been written on this…

Some Index Funds Are Bad Choices for Investors

US News

Many index funds are smart choices for investors, but that doesn’t mean all of them are. I have long been a proponent of “evidence-based” investing. For many investors, this means investing in a globally diversified portfolio of index funds with low management fees, exchange-traded funds or passively managed mutual funds. In order to make this…

Wall Street’s Lame Excuses for Active Fund Performance

US News

The securities industry is working itself into a frenzy trying to explain why you should ignore historical data that indicates most actively managed funds underperform their benchmarks. Some of the reasons they provide do not withstand scrutiny. Here’s a small sample of their lame excuses: 1. Last year was an aberration. According to Dan Culloton,…

How to Find the Best Investment Advice

US News

One of the most difficult aspects of investing involves sifting through the daily barrage of advice offered by “experts.” More often than not, this advice is calculated to enrich the securities industry at your expense. One way to determine whether investment advice has merit is to ask for the data on which an assertion is…

This Book Obliterates Active Management

US News

An intriguing new book, “The Incredible Shrinking Alpha,” presents an overwhelming weight of research which leads to the inescapable conclusion that the pursuit of “alpha,” or returns above an appropriate risk-adjusted benchmark, is a fool’s errand. The book was written by my colleague Larry Swedroe, director of research at The BAM Alliance, and Andrew Berkin,…

Almost Everything You Know About Investing Is Wrong

US News

Many of you have some fundamental beliefs about the process of investing. These beliefs understandably guide your investing behavior. Unfortunately, they are often dead wrong. This is not surprising, because the financial media and the securities industry have a vested interest in encouraging short-term thinking and other emotional behavior harmful to your returns. Here are…

Private College 529 Plan May Be a Smart Choice

US News

What if there were a guaranteed way to lock-in today’s tuition rates at a diverse group of more than 275 private colleges across the country, for up to 30 years? This could end up being a very significant benefit. According to data compiled by the College Board, the cost of attending a private, nonprofit, four-year…

5 Bond Myths Investors Should Know

US News

Investing is often made more complicated than necessary by the financial media and the self-styled “experts” featured in its coverage. So maybe it’s not surprising that, for many investors, bonds are a commonly misunderstood subject, because they really are even more technical and confusing than stocks. Investors have many choices when deciding how to invest…

8 Smart Tax Moves for Investors

US News

Retain more of your investment income with savvy tax planning. Good investors are good tax planners. Tax planning isn’t as fun as investing – or fun at all – but it helps you keep as much of that hard-won investment income as possible. Dan Solin, a wealth advisor with Buckingham and director of investor advocacy…

Don’t Rely On These ‘Professional’ Investors

US News

By definition, being a “professional” means your level of expertise is greater than that of amateurs. It would be surprising if professional golfer Phil Mickelson routinely posted lower scores than the average weekend player. Do you really believe the tennis champion at your local club would make a credible showing against any of the top…

Learn From This New Low in Financial News

US News

I woke up on Dec. 14 to this stunning headline in the New York Post: “High school student scores $72M playing the stock market.” It was a sensational story. The story was sourced to an original report in New York Magazine that reported Mohammed Islam, a 17-year-old student at Stuyvesant High School, was “rumored” to…

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