This blog is all about math.  No, wait, don’t leave.  It’s really about making sure you understand how to properly calculate the returns you get from your investments.  Because if you’re not getting the return you expect, you might be putting your future goals at risk. Most everybody is probably familiar with the concept of…
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A well-diversified investment portfolio should include some investment in bonds issued by foreign governments or companies.  But it can be difficult (and expensive) to buy foreign bonds yourself.  And there’s an additional risk associated with bonds denominated in foreign currencies that you don’t face when investing in U.S. bonds, namely currency risk.  If the currency of…
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In 2013 the U.S. stock market had its best return in over 15 years.  When you reviewed your portfolio in January of 2014, did you add to your investment in U.S. stocks because they did so well the previous year?  If so, then you were guilty of what is called in the jargon of behavioral…
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It’s well understood that investment risk and returns go together.  Simply put, investors expect a premium, generally in the form of a higher return, for investing in higher-risk securities, where risk is quantified as return variability or volatility. This explains why over time stocks outperform bonds and why the returns on small company stocks are…
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Stocks are among the most volatile of the many types of publicly-traded investments available to the public.  Whether you invest in stocks directly or through mutual funds or exchange-traded funds (ETFs), you might feel more comfortable with your investments if you knew you could limit your losses in case the market or the particular company…
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