Virtues of Do It Yourself Bond Laddering

Bond ladders are frequently criticized in the financial media and even among some professional advisors (who, I would point out, are often able to use only bond mutual funds or ETFs). Earlier this week, we corrected some common misperceptions regarding individually tailored laddered municipal bond portfolios. Today we’ll move on to the many advantages of owning […]

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Topics: Advice, Investing

Four Myths About Investing in Presidential Election Years

Earlier this month, we celebrated the declaration of our country’s independence. This is also the month that both our major political parties will hold their national conventions, perhaps making this the perfect time to examine what we, as a nation, do to ourselves financially every four years as we exercise the electoral system our forefathers […]

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Topics: Advice, Investing

Retirement Is Scary. Plan it Out

Retirement creates many challenges. Unfortunately, while about 10,000 Americans retire daily, the sad truth is that most people seem to spend less time planning for retirement than they do for a vacation. Anxiety regarding our futures is a common ailment, especially among the millions of Americans rapidly approaching the end of their working years. And […]

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Topics: Advice, Retirement

The Influence of Recent Market Returns on the Risk Tolerance of Individual Investors (Part 2)

Last week, we examined a study that found investors’ risk tolerance fluctuates positively with recent market returns. This behavior is in direct conflict with rational economic theory, which dictates that when market returns become negative, wealth contracts and risk aversion should therefore decrease (while risk tolerance should increase). Instead, the authors found that investment losses, […]

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Topics: Advice, Investing, Investment Strategy

The Influence of Recent Market Returns on the Risk Tolerance of Individual Investors

The recency effect—that the most recent observations have the largest impact on an individual’s memory and, consequently, on perception—is a well-documented cognitive bias. This bias could impact investment behavior if individuals focus only on the most recent returns and project them into the future. Such behavior may lead investors to experience a reduction in their […]

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Topics: Advice, Investing, Investment Strategy

Closing the Gender Gap: Financial Life Planning for Women

You can feel the buzz in the air. Women are on the rise, financially speaking. We control $5 trillion in investable assets in the United States, and the potential for future growth is enormous. Today, women represent more than 51 percent of the workforce and are starting businesses at twice the rate of men. With more […]

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Topics: Advice

A Simple Strategy Your Broker Hopes You Won’t Learn

The data is irrefutable. There’s a direct correlation between low fees and higher expected returns. Two recent studies from Morningstar bring this point home in a powerful way. The significance of low fees In the first study, Morningstar found that asset-weighted expense ratios (the management fees charged by mutual funds) continue to decline. Investors are taking […]

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Topics: Advice, Investment Strategy

The Elephant in the Room: Addressing Aging Issues with Family Elders

As a former lifeguard, I know better than most how quickly the ocean’s mood can change. I understand how dangerous it can be if you enter the water unprepared. I found I could spot the weak swimmers pretty easily. Their poor form and stamina told me that if a set of big waves came in […]

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Topics: Advice, Risk Management

Election-Year Politics and Stock Market Forecasts

Over the past several weeks, many commentators have opined on how the stock market would react to Donald Trump winning the general election and becoming president of the United States. The latest notable prediction came from Dallas Mavericks owner and TV personality Mark Cuban, who said that “there is a really good chance we could see a […]

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Topics: Advice, Investing, Investor Behavior