emotionalOver the last couple of years, volatility has really become the norm. And it’s gut-check time, it’s a shakeup, it’s an opportunity to check your emotions at the door and change the way you invest. If you’ve been feeling emotional lately (and you’re not alone), it’s an opportunity to drop it. If a swing of a few hundred points in a day is getting to you, then consider doing and thinking about things differently. If you’ve lost your perspective, or perhaps you never even had one, it’s an opportunity to regain it, or formulate one now, finally. And be honest in doing so, above all. Where are your one-sided stock picks and investment choices today? Where are your risky bets on marijuana stocks sitting right now? You have an opportunity right now to stop gambling and embrace passive investing.Continue reading

man-96868To many, the markets look expensive right now. If you’ve done a thorough job understanding and describing your investment objectives and your capacity to invest and bear risk, and you have money at the ready, you might be sitting on the sidelines wondering what to do right about now, especially as the markets see-saw. How to make a market entry? Do you wait for a big correction before you purchase anything or do you plow forward? It’s natural to feel hesitant. Nobody enjoys buying into something only to see it decrease in value in short order. It’s a sure way to feel like a sucker. Then again, if you wait for the markets to go down and they don’t, you’ve just shot yourself in the foot and missed out on returns. Instead of attempting to predict or time the markets, enter them with confidence and then rebalance your portfolio as necessary to deal with what comes next, including any potential corrections. Continue reading

HalloweenEffectThe Halloween effect just might be more of a trick than a treat – think less chocolate and more witch’s brew. The end of October and beginning of November mark the start of the six-month period of November-April during which, historical evidence shows, stocks have outperformed when compared with their performance during the other six months of the year, May-October, or with the performance of a general buy-and-hold strategy. Indeed, over the past year, the numbers seem to indicate something similar for the U.S. stock markets as per a mutual fund stand-in, the Vanguard Total Stock Market Index Fund (VTSMX) – positive returns of close to 10% from November 1, 2013 through May 31, 2014, as opposed to only a little over 5% from June 1, 2014 through October 31, 2014. This outperformance continues to lend credence to the concept of market timing and fuel the debate over active versus passive investment strategies. And so, with another potential bumper period for stocks possibly about to get under way, we owe it to ourselves to address the topic and speak to why we shouldn’t give the wolf in sheep’s clothing any candy; why it is not advisable to indulge in this active strategy in spite of evidence of a persistent seasonal pattern.Continue reading

Venn_0000_0001.svg_The US equity markets have continued to climb steadily since their abysmal lows of early 2009, so much so that it seems to be making some people nervous (then again, some folks are just perpetually nervous and others make money off creating anxiety). Posts abound voicing expectations at the very least of a correction if not a serious downturn soon. Downturn ahead or no, when it comes to investing you should ask yourself a couple of questions before you go diving down the rabbit hole one more time (or for the first time): How well do I know myself? Should I even be investing at all? Before selecting a fund, before determining your asset allocation, before putting even one cent on the table, you owe it to yourself to have a frank conversation with yourself about…well…yourself. Specifically, you owe it to yourself to assess your true risk profile. Getting a handle on this could be one of the most important activities you ever undertake as a current or would-be investor. The bottom line? Taking a risk-attitude questionnaire is not enough. Continue reading