Weston Wellington has written a great year end review with market commentary.
Even more important is the media commentary. Click below to read.
Two keys of investing:
1. Pick smart investments to start with
2. Stay disciplined
Discipline is a lot harder than it seems.
Let’s take a look at a mutual fund, DFA US Small Value (DFSVX) vs. the S&P 500 over the last 20 years. The fund’s return….12.75% annualized. Your money would have grown over 10 times if you just stayed put, despite crashes in 2000 and 2008.
Now is one of those times when it will be tempting to give up diversification.
Below is a chart of the S&P 500 index (which is all US Large Company stocks) and a globally diversified 60% stock portfolio. The chart spans the last four years (Jan. 1, 2010 to Dec. 31, 2013)
Over the last four ...
Janet Yellen was confirmed today as Chariman of the Federal Reserve.
Say what you want about her being too liberal — or whatever the criticism is — there are two things that I believe are important to point out.
1. This is following a long line of non-partisan appointments. Greenspan with Reagan, which was continued by Clinton. Bernanke (the Democrat) who was appointed by Bush and continued by Obama. And now Yellen. More than anything, they simply seem to ...
Investors are starting to capitulate with foreign emerging markets investments.
In 2009, the story was that emerging markets would obviously do better than the US. There was so much more room for them to grow….and China was buying all our debt. Soon they would own us.
By Mid 2013, the story had changed. Emerging markets had underperformed the US for several years. Now might be a buying opportunity! Valuations looked good.
Now at the beginning of 2014, investors are starting ...
2013 has closed out. Let’s take a look at what happened.
- The S&P 500 had its best year since 1997
- Foreign Emerging Markets had negative returns
- Gold, precious metals and other commodities had a horrible year
- Interest rates came up a little, but didn’t get out of hand
- Inflation stayed comfortably low
If someone had told you this was coming as 2012 closed out, would you have believed them? Probably not.
The good news is that you don’t have to be able to predict ...
A little more interesting coverage on index or passive investing. click here.
I am linking to this video because it contains some of the bad arguments against indexing and also some good responses.
So watch the video, and listen to Henry Blodget. And whatever you do, don’t listen to the guy with the buzz cut and the glasses. If you listen carefully, you realize he basically ...