Low oil prices will tank the energy industry. Controversy over fast-track trade will harm U.S. exports. Slow economic growth will stifle the stock market. You hear a lot of predictions, especially in the harrowing aftermath of the financial crisis. This augury is an insidious racket, though, as behavioral research shows.
Whenever stocks hit a speed bump, investors wonder, “Where is the market headed?” It is human nature to seek a prediction to guide our actions. But recent turbulence in the market means little – and can lead investors astray. Here’s why.
Despite their trailing the broad market lately, hedge funds continue to attract money. Why? Part of it may be snob appeal – they are reserved for upper-income folks. Yet they also are a good way to diversify your portfolio. And some actually do spectacularly well.
Guess right with men’s college basketball champ Duke Blue Devils? Think the Golden State Warriors will take it all this June in professional hoops? If you’re among the millions of fans who systematically try to pinpoint winners before the big games, similar strategies can also apply to your stock picks.
Thanks to the strong dollar, overseas investing is a lot more difficult. While the dollar won’t be so robust forever, it likely will for a good while.
Both the stock and bond markets remain volatile as investors climb the proverbial “wall of worry.” Don’t worry. While something horrible always could crop up, it’s better to focus on the strong underlying growth trend in the U.S. economy and the influence of easy money policies abroad.
Why do fewer people own stocks nowadays? Part of the answer is the bad karma of two horrible bear markets, and part of it is generational. Still, there is hope that this situation will turn around.
Most of us consider ourselves logical and objective when we invest (or make any decision, for that matter). Yet subtle biases and behaviors strongly influence us.
So you sold your technology startup or enjoyed some other event that produced a lot of liquid assets (cash). Now you’ve got excess money to put to work or just enjoy, and engage a financial advisor to help you. But how do you keep your money safe? By asking your advisor some hard questions up front.
Investing has never been more accessible, more necessary or filled with many booby traps. You can never guarantee complete success on Wall Street, but knowing a few common blunders can improve your odds.