Tag: Action Point

MAKE SURE YOU ARE TRULY DIVERSIFIED

September 10, 2021


MAKE SURE YOU ARE TRULY DIVERSIFIED

  • Not truly diversified until you own something that makes you uncomfortable
  • Uncomfortable usually means: unpopular, underperforming and cheap
  • “Uncomfortable” assets today include:
    • Value stocks
    • Emerging markets stocks and bonds

EXTEND YOUR INVESTMENT TIME HORIZON

April 9, 2021

EXTEND YOUR INVESTMENT TIME HORIZON

PROBABILITY OF A LOSS FOR THE S&P 500
(Rolling Price Returns, Jan 1930 – Jan 2021)

  • 1 day investment = 46% chance of loss
  • 1 year investment = 31% chance of loss
  • 5 year investment = 19% chance of loss
  • 10 year investment = 10% chance of loss

Source: Richard Bernstein Advisors “Insights” March 2021

Watch the related WEALTHTRACK episode.

MAKE SURE YOU ARE INVESTED IN SOME BENEFICIARIES OF AN ACCELERATING ECONOMY

March 26, 2021

MAKE SURE YOU ARE INVESTED IN SOME BENEFICIARIES OF AN ACCELERATING ECONOMY

Laggards of last decade coming to life

  • Value stocks should outperform growth
  • Small-caps should outpace large companies
  • International stocks, particularly in emerging markets should lead domestic

Watch the related WEALTHTRACK episode.

READ AGAINST THE GODS: THE REMARKABLE STORY OF RISK

February 19, 2021

READ AGAINST THE GODS: THE REMARKABLE STORY OF RISK


Against the Gods: The Remarkable Story of Risk

Watch the related WEALTHTRACK episode.

AVOID MARKET TIMING

February 12, 2021

AVOID MARKET TIMING

  • Historical evidence shows market timing leads to significantly lower returns than buy and hold strategy
  • Market timing also leads to increased volatility
  • “…the volatility of investor returns is higher than the corresponding volatility in nearly all specifications.”
  • “Specifications’’ considered: individual stocks, stock mutual funds and stock indexes in U.S. and major international markets
  • Increase in volatility with trading is significant: 10-75% higher.

Source: “The Volatility of Stock Investor Returns” Ilia D. Dichev, Emory University, Xin Zheng, University of British Columbia

Watch the related WEALTHTRACK episode.

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