Category

Stock Markets

Market Volatility Can Test the Resolve of Investors Who React Emotionally

Some Perspective on Market Volatility

By | Investing Lessons, Investment Returns, Market Corrections, Returns, Stock Markets, Uncategorized | No Comments

Before the brief ten percent market correction that began on January 26th and ended on February 8th, domestic equity (stock) markets enjoyed the longest period of market calm in history.  Prior to the recent period of volatility, the S&P 500 had not retreated by 3% over one day or several days since November 4, 2016.  The streak shattered the previous…

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2017:  The Year in Review

The Year in Review: 2017

By | Investing Lessons, Investment Returns, Market Index, Returns, Stock Markets | No Comments

Heading into the year, 2017 was viewed by many investors with a great deal of trepidation and concern.  Political turmoil in the US, uncertainty in the global  economy, rising tensions in the middle east, strained relations with North Korea, and an eight year-old domestic bull market gave many investors pause for the prospects of 2017. For all the potential causes…

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Sir Isaac Newton's South Sea Bubble experience provides investors with valuable lessons.

Lessons from Newton’s South Sea Bubble Disaster

By | Investing Lessons, Market Corrections, Stock Markets | No Comments

If I were to postulate that Sir Isaac Newton (1642 – 1727) was one of the most brilliant minds the human race has ever seen, I would have ample evidence to support my position.  The English physicist and mathematician is legendary in his contributions to the advancement of mankind.  Newton is credited with inventing the reflecting telescope in 1671.  Newton…

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Should Stock Investors Worry About Rising Interest Rates?

Should Stock Investors Worry About Rising Interest Rates?

By | Interest Rates, Returns, Stock Markets | No Comments

We have been in a low interest rate environment for quite a few years now, but the Federal Reserve has signaled its intention to raise interest rates throughout 2017.  In recent months, several clients have asked the question of how rising interest rates would affect stock prices in the coming months. Realizing that many of you may have the same…

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The Dow Jones Industrial Average reached 20,000 points.  So what?

Dow 20,000: What’s in a Number?

By | Dow Jones Industrial Average, Market Index, Stock Markets | No Comments

The Dow Jones Industrial Average (DJIA) reached a major milestone earlier this year when it finally surpassed the 20,000 hurdle.  The event was widely ballyhooed by investors and media outlets alike.  Almost immediately, articles and news stories questioning how much higher the index could go began to appear. Our local newspaper even went so far as to write an article…

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The 'average' investor earned slightly more than 5% in their investment portfolio in 2016.

How Did the Average Investor Do in 2016?

By | Active Investing, Behavioral Finance, Investment Returns, Passive Investing, Real Returns, Stock Markets | No Comments

Openfolio, a company dedicated to providing information and transparency to investors, recently released some data about how investors performed in 2016.  Openfolio aggregates the performance data from over 70,000 subscribers who voluntarily and anonymously share their investment portfolio information with Openfolio.  The idea is that sharing data among its users should help them realize better investment performance.  We will discuss…

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Over one, five and ten year periods over 80% of actively-managed funds under-perform their benchmarks.

Active Managers Trounced Again in First Quarter of 2016

By | Active Investing, Passive Investing, Stock Markets | No Comments

Volatile markets are generally viewed as a prime opportunity for active managers to shine and demonstrate their stock-picking and market-timing skills and prowess.  Equity markets don’t get much more volatile than they were in the first quarter of 2016, but the investment results for active managers were disappointing. How volatile did equity markets get?  Well, consider that the S&P 500…

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March Madness wasn't just about the basketball games.

March Madness!

By | News and Events, Stock Markets | No Comments

One of the greatest spectacles in American sports is the NCAA basketball tournament that commences in March and crowns a champion in early April.  The tournament has grown greatly in popularity over the last two decades leading to a huge increase in participation in office betting pools and online bracket contests, even among the most casual fans.  The loss of…

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Looking into the Rearview Mirror

What Does January’s Volatility Mean for Markets?

By | Market Corrections, News and Events, Stock Markets | No Comments

It is safe to say that we have all benefited from well-functioning capital markets throughout our lifetime.  Efficient capital markets have produced technological and medical advances that have made our lives easier, more enjoyable, and longer.  Efficient markets also facilitate wealth creation and allow us to have higher standards of living and enjoy comfortable retirements.  So it is important to…

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Should Investors Sell After a Correction?

By | Financial Planning, Market Corrections, Stock Markets | No Comments

Dimensional Fund Advisors (DFA), the mutual fund complex we place most of our clients’ assets with, employs quite a variety of professionals on its staff.  As you would imagine, many of the people who work for DFA are quantitatively oriented with degrees in finance.  On the opposite end of the spectrum is Weston Wellington, who holds a Bachelor of Arts…

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