Rising Interest Rates – Whose Risk is It?

Interest rates have crept up in the last few days. This leads me to a point I have tried to explain to many clients. Banks are supposed to deal with interest rate risk. Don’t let them dump this risk on you.

Many financial prognosticators have been calling for a rise in interest rates for years, and they are quick right to start claiming victory. I certainly wouldn’t say interest rates are sure to march straight upwards ...

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Dangerous Knowledge

When I browse the financial media, it makes me extremely grateful for my experience in the investment industry. It helps me to separate the good information from the bad.

Here is a particularly dangerous article, masquerading as solid wisdom. Without a lot more experience and knowledge it would be easy to read an article like this and take it to be truth.

http://finance.yahoo.com/news/cramer-many-stocks-too-many-222302476.html

The article basically says to hold about ...

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Unpredictability leads to Unpredictability

Carbon pollution, national security, politics, an earthquake, a tsunami, and a radioactive metal all combine to remind us how unpredictable investments can be.

I am always amazed at how predictable most people think the financial markets should be, especially when these very same people freely admit the unpredictability of other events.

In particular, I think the Uranium trade that went bad on March 11, 2011 is a great example.

First, there were a lot of very reasonable, learned, ...

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All that Glitters … Doesn’t

I’ll be blunt.  Many people think gold is a great investment, but it is not the best way to hedge yourself against inflation. You might make money in gold, even a lot.  You might lose money in gold. Either way, it isn’t a smart move if your objective is to protect your money against inflation.

The gold theory

Many financial “experts” are constantly trying to tie gold’s performance to inflation. The argument generally goes that fiat money ...

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American Funds Won’t Buy You What?

A sandwich. “American Funds won’t even buy you a sandwich. Ha ha ha ha.”

Back around 2005 I heard these words uttered by a financial products wholesaler. These are guys that go around and try to promote packaged investment products to financial advisors. Their goal is to convince the advisor to then sell these products to their own clients.

A thin sheen of sleaze

It was a lunchtime presentation in a medium size hotel conference room. The sales ...

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How Bad Were the Naughties?

The 2000s (the “naughts,” or “naughties”) were really, really bad for the investor in US stocks (especially large cap stocks).  I mean really bad. Even worse than a lot of people realize.

Breaking down the bad

Kicking off the Great Depression, the stock market began to fall in September 1929. Here are the 10 year returns of the S&P 500 following September 1929.  Let’s compare these returns to those following the tech crash that started in spring of ...

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