Mutual Funds

What’s Buffett’s Secret, Really?

Invest like Buffett? How many times have you heard that one? Not everyone has his billions, which allows the Oracle of Omaha to snatch up deals unavailable to most of us, like his 2009 purchase of Burlington Northern Santa Fe railroad. But once again, his yearly missive to his shareholders shows how simple the keys to his success are.

Bettering Kids’ Lives (Pt. 3)

Our previous articles looked at our children's financial challenges and money moves we can make to help our kids. The foremost lesson for children, though, is to always save 10% of income – whether from an allowance, babysitting gigs or gifts, as well as their gross earnings and investment income later. Teach them early how to save and you teach the difference between mere riches and true wealth.

Buffett’s Edge on Hedge Funds

Fees count in investing. Just ask storied investor Warren Buffett, who is far ahead in his highly publicized wager with the hedge fund industry. His bet: Over 10 years, a simple index fund tracking the Standard & Poor’s 500 will outperform the so-called experts who run hedge funds. Buffett’s advantage is that the hedge funds charge much higher fees than the index fund.

Too-Rosy Hedge Fund Returns

Hedge funds are supposed to give you superior returns. Many advertise their performance as the result of low price volatility, avoidance of frightening risk-taking and not hewing closely to the overall market. But a close look reveals that in the aggregate these claims are questionable.

Hedge fund index returns show the problem stems from stale data that mask their true underpinnings.

Low Volatility and Market Fear

After recent market gyrations, investors remain nervous, as if the market took a more serious hit than it did. Many think that another bout of weakness is around the corner. But one indicator – showing low market volatility – suggests that such fears are overblown.

The equity market rally’s fizzle early in 2014 promoted the unease. Less than a month into the year, the Standard & Poor’s 500 fell more than 5%, causing much angst among investors, financial advisors, and analysts. Some predicted that a brutal correction was afoot.

Avoiding Money Mind Traps

We all love to watch our investments when we’re winning in the market and making money. The problem comes when we lose. The temptation to make rash decisions, whether in buying or selling investments, is the real enemy of investors.

Our behavior when we fall short of expected returns causes us real problems. Why does it seem losses count twice as much to us as gains?

Forget Investment Benchmarks

How should you measure your mutual fund portfolio’s performance? The standard answer is against a benchmark, typically an index like the Standard & Poor’s 500. But that’s a misplaced focus. The better measure is how much risk you are taking.

Guaranteed Annuity Payout?

Many investors, panicked by the market crash of 2008-2009, started a search for some type of investment vehicle to protect them from the next market downturn. Some decided the answer was a variable annuity with a "guaranteed living benefit" rider. That’s a mistake.

Navigating Mutual Funds

Mutual funds carry unique risks and benefits just like other investments, despite marketing that tells you otherwise. As ubiquitous as they are, a lot of people aren’t clear how they operate and what the differences are among them.

Here’s what to look for.

How Smart Is Smart Beta?

New alternatives to conventional exchange-traded funds and mutual funds, which are weighted by their market value, have gotten a lot of attention lately. But are these so-called smart beta products any better? Maybe, maybe not. Here are a few caveats.


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