Investing

What Great Rotation?

The epic bond rally that began in the early 1980s seems about to end, as the Federal Reserve eyes raising interest rates. So investors keep hearing about a so-called Great Rotation out of bonds into stocks. Well, it’s not happening, due to lingering leeriness about equities after the horrendous market slide that the financial crisis created – memories that this month’s slide have reinforced.

Money Lessons From Baseball

As you cheer your team in this year’s World Series, consider that America’s favorite pastime can teach you a lot about America’s main preoccupation: money.

How does baseball resemble your investing or financial decisions?

1.      Probability of outcomes matters, whether concerning stolen bases or investment returns and financial goals.

2.      Separating a manager’s skill and luck takes a long time.

3.      A quality process matters more than immediate or short-term outcomes.

Spotting Good Mutual Funds

The explosion of the 401(k) and decades of dwindling employer pensions powered mutual funds to dominance in the investing landscape. The funds, once meant to simplify investing for the little guy, flourished to the point of becoming almost as confusing to pick as individual stocks. What can you look for?

Avoid International Stocks?

War rages in the Middle East and Ukraine. An economic deceleration dogs China. Once again, Japan struggles to revive its economy. Europe heads into another economic slowdown. Why bother investing outside America?

Because the U.S. no longer dominates world stocks, foreign troubles will eventually abate and overseas bargains now abound.

Make Your Money Last (Pt. 1)

You retire and don’t even own an alarm clock anymore. Then it hits you: Can you really afford this lifestyle? Did you save enough and invest right? How long will your money last?

This first of two articles presents strategies to ease your worry about outliving your savings.

Plan a bigger portfolio than you think you’ll need. When planning for retirement, never imagine you’re going to get off easy. Think the opposite.

Currency Manipulation Mess

Around the globe, government manipulation of currencies and stock markets are increasingly common. The likely outcome: a huge mess, menacing the world’s economies, including that of the U.S.

The value of money is variable. The currency of one country continuously fluctuates in value relative to the currency of every other country – and owing to global interdependence, those fluctuations can have a dramatically baleful economic impact.

The Market: Exaggerated Woes

What’s odd about this stock rally is how it over-reacts to events, such as turmoil overseas, that show little ability to harm the U.S. economy – which after all is what American equity values are mostly based on.

Consider the latest market buffeting. In September, the Dow Jones Industrial Average lost 0.31%, the Standard & Poor’s 500 fell 1.58%, and the Nasdaq dropped 2.15%.

Then on Oct. 1, the markets really got hammered. The Dow slid 1.4%, the S&P 500 1.32% and the Nasdaq 1.59%.

Investing? Know Your Goals

You know you need to put money away. You might want to save for retirement or for your child’s education or just need a rainy-day fund for emergencies. Whatever your target, know that different financial goals require different strategies.

I hate it when a client says, “I have X amount of dollars to invest” and yet won’t tell me anything about his or her goals. I can’t give you a good answer unless I can understand what you’re trying to accomplish with money.

Lagging Small-Caps: Bad Sign

The stock market rally of 2014 is not uniform. Turns out that not all stocks are created equal. Small–cap stocks are negative this year, at odds with their historical tendency to do well in an economic expansion. That sounds a cautionary note for investors.

Top Mistakes Investors Make

Investors are human and they make lots of mistakes. A panel at National Financial Advisors Week spotlighted some of these errors and had some good tips on how to avoid them.

When the stock market goes south is when a lot of mistakes occur. “History shows we are overdue for a correction,” noted David Callaway, editor-in chief of USA Today and the panel’s moderator.

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