Are your choices based on evidence or emotion? Information vs. instinct. When it comes to investing, many people believe they have a “knack” for choosing good investments. But what exactly is that “knack” based on? The fact is, the choices we make with our assets can be strongly influenced by factors, many of them emotional, that we may not even be aware of. Deal du jour … [Read more...] about Making Investment Decisions
Have you ever been confused by the jargon used on Wall Street? Allow me to translate some esoteric stock market terms into plain English. Blue chips: Stocks with a history of consistently strong dividend payments, issued by huge corporations with solid management. In addition, a nickname for the Dow Jones Industrial Average, which includes 30 companies that usually deserve … [Read more...] about Translating Stock Market Jargon
Is your money gaining or losing purchasing power? The real rate of return is an important personal finance concept to understand. It’s the rate of return on your investments after inflation. The real rate of return indicates whether you are gaining or losing purchasing power with your money. So with inflation checking in at a 5% annual rate, does that mean any i … [Read more...] about Inflation & the Real Rate of Return
Focusing on Your Strategy During Turbulent Times. Investors are people, and people are often impatient. No one likes to wait in line or wait longer than they have to for something, especially today when so much is just a click or two away. This impatience also manifests itself in the financial markets. When stocks slip, for example, some investors grow uneasy. Their … [Read more...] about Should You Care What the Financial Markets Do Each Day?
What they are; why they matter. For many investors, it can be tempting to think of one's portfolio in terms of “gains” or “losses.” True, this is a central concept to understanding market behavior, but to truly maximize your investing knowledge, you also need to know about “unrealized gains,” “unrealized losses,” and how they can work to your advantage. As always, the follo … [Read more...] about Unrealized Loss and Gain
Are your choices based on evidence or emotion? Information vs. instinct. When it comes to investing, many people believe they have a “knack” for choosing good investments. But what exactly is that “knack” based on? The fact is, the choices we make with our assets can be strongly influenced by factors, many of them emotional, that we may not even be aware of. Deal du jou … [Read more...] about Making Investment Decisions
What can you do to allay this risk? Knowledgeable investors are aware that investing in the capital markets presents any number of risks – interest-rate risk, company risk, and market risk. Risk is an inseparable companion to the potential for long-term growth. Some of the investment risks we face can be mitigated through diversification.1 As an investor, you f … [Read more...] about The Investment Risk You May Not Know About
The S&P 500 represents a large portion of the value of the U.S. equity market Did you know that nearly $10 trillion in assets are benchmarked to the Standard & Poor’s 500 Composite Index, including about $3.5 trillion in index assets?1 The S&P 500 is ubiquitous. It is constantly referenced in financial and non-financial media, and we may compare the return o … [Read more...] about The Anatomy of an Index