Do Stop-Losses Reduce Investment Risk?

Do Stop-Losses Reduce Investment Risk?

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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Is Active Investing Better Than Passive?

Philosophically most investors fall into one of two camps when it comes to selecting mutual funds.  Some prefer actively managed funds while others have a preference for those that are passively managed.  What’s the difference?  According to Investopedia, active managers rely on analytical research, forecasts, and their own judgment and experience in making investment decisions…
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Are Stock Prices Poised For A Fall?

Among the numerous economic and financial indicators that investment advisors utilize in an attempt to predict future stock market performance there is a pretty broad consensus that company profit margins (or earnings per share) are one of the better predictors.  The challenge, of course, is the difficulty of predicting future profit margins.  Currently for the…
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Are Women Better At Investing Than Men?

The New York Times recently reported on research at USC suggesting that when under stress, men take more risks than women by focusing on bigger wins, even when they are costly and less likely. One experiment involved giving points for inflating digital balloons on a computer.  The trick was to pump them enough to maximum…
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How to Ease Out of the Market

This is a companion blog to the one I wrote previously on using dollar cost averaging (DCA) as a way to slowly buy into the market to avoid the risk of investing a large amount of cash at a market peak. That approach works when you are in the accumulation phase of your life (the…
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How to Ease Into the Market

Have you ever been in a situation where you found yourself with a large amount of cash to invest? Perhaps it was from an inheritance, or from a bonus at work.  Or maybe you actually won a lottery!  In any case, how did you go about investing the money?  Did you identify some number of…
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