If you were holding an S&P 500 mutual fund in 2008 that dropped 37%, you’d likely feel that your fund should go down in history as one of the worst ever. But in reality the fund didn’t do anything wrong except to invest in a part of the market that happened to experience a calamitous…
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Are you currently holding a mutual fund that is not performing well compared to your other assets? Before dumping it, consider that it might be an indicator that your investment portfolio is well-diversified. I’ve written often on this topic, but it’s still worth reviewing how diversification works. In non-mathematical terms, it’s the inclusion of multiple…
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As I wrote in a previous blog, we live in a world of uncertainty. It’s impossible to predict future stock prices no matter how fancy the purported methodology.   But that’s no reason not to invest.  Most of us need to grow our savings in order to keep up with inflation as well as to be…
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What’s going on with the stock market right now? We started the year with the worst market performance in history.  In February, volatility continued to reach multi-year highs.  As if that weren’t bad enough, the media reported in March that second quarter earnings were expected to be broadly lower. Things were shaping up to be…
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A cornerstone of Modern Portfolio Theory is the concept that you can reduce the risk (variation) of an investment portfolio by adding securities whose performance does not correlate with those in the portfolio. This led to the identification of asset classes – groupings of securities that perform similarly under certain economic conditions – and ultimately…
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