The Emotional Investor (Part 2)

By |2017-07-17T12:23:03+00:00February 12th, 2015|Global Market Update|

How do we manage our emotions? Source: Behaviorgap Investing is challenging. It brings out the worst in us. When the market is running, we just want more. And when the market goes down we’re tempted to sell just when things are bottoming out. It’s been shown that money goes into and out of mutual funds following the market. As a result, these investors typically underperform their funds by a lot—often by two to three percent. Three percent may not seem like much, but over [...]

The Emotional Investor (Part 1)

By |2017-07-17T12:23:04+00:00February 11th, 2015|Global Market Update|

How do you feel about your investments? Source: 3ammagazine On one level, that’s a foolish question. Investments aren’t supposed to be objects of affection. It’s one of the most basic errors to fall in love with a stock. You should never love something that doesn’t love you back. It keeps you from selling when you should; it makes you focus on just one small part of a much larger financial picture—like obsessing on the Mona Lisa’s hands. […]

Luck, Skill, and Money

By |2017-07-17T12:23:04+00:00February 10th, 2015|Global Market Update|

Are top-performing investors good? Or just lucky? Source: Wikipedia It can be hard to tell the difference. When Nobel laureate Gene Fama studied outperforming mutual fund managers, he found that most of them were just taking big risks. Their portfolios returned more than the market, but their portfolios were also more volatile than the market. […]

Day to Day Data

By |2017-07-17T12:23:04+00:00February 9th, 2015|Global Market Update|

It’s 5 o’clock. Do you know where your data is? Source: Business Korea Data breaches have become routine. Last year Sony, JP Morgan, Home Depot, and several other major corporations had been hacked. This year Anthem and TurboTax have been attacked. Hundreds of millions of personal records have been compromised. Are data breaches inevitable? […]

National Geographics

By |2017-07-17T12:23:04+00:00February 5th, 2015|Global Market Update|

Why are some nations richer than others? Source: Growth Economics Blog Different countries have different levels of wealth. This truism has inspired all kinds of discussion and analysis over the years, from Adam Smith’s The Wealth of Nations to Jared Diamond’s Guns, Germs, and Steel. One factor is geography. Some places have more resources: fertile soil, natural ports, precious metals. […]

Going Negative

By |2017-07-17T12:23:04+00:00February 4th, 2015|Global Market Update|

What’s up with negative interest rates? Source: CNN Temperatures aren’t the only thing below zero these days. Around the world bond yields have gone negative. It started a few years ago in the US, when ultra-short Treasury Bills would go negative right around quarter-end. That was understandable as a combination of the Fed’s Zero Interest Rate Policy and institutions needing Treasuries for collateral on swap contracts. […]

The Size Effect

By |2017-07-17T12:23:04+00:00February 3rd, 2015|Global Market Update|

Small is beautiful. Source: Judyta Frodyma That’s what I thought when I looked at a chart of long term stock market returns. Small cap stocks have grown significantly more than large-cap stocks over the long haul. But they do so at the cost of higher volatility. And that makes sense. Small companies have more potential for growth than large firms, but they don’t have the big bank accounts or sophisticated risk management systems that big companies do, either. […]

Balancing the Books (Part 2)

By |2017-07-17T12:23:05+00:00February 2nd, 2015|Global Market Update|

Why are balance sheets important? Source: Balance sheets give a snapshot of a company’s finances. They list and value all their financial assets and liabilities. As such, they’re subject to abuse by any firm that wants to present a distorted picture of how it’s doing to investors or creditors. […]