Approximately 80% of all investors use individual stocks to populate their portfolios. So why buck the majority trend and use index ETFs? That is a reasonable question that merits an answer. In fact, several answers. Confession: I do select a few individual stocks for certain portfolios, but it is rather rare. Investors inclined toward picking […]
Music Recommendations for 10 November 2013
Two music suggestions are coming your way this week as not everyone will enjoy the jazz recommendation. Recently recommended to me was “The Complete Django Reinhard and Quintet of the Hot Club of France.” Classic Early Recordings is the closest I could come to the collection I was able to find at our local library. […]
Retirement Planning Mistake #10
Investors do not monitor their portfolio adequately. Rare is the investor who can place their hands on the Internal Rate of Return (IRR) of their portfolio. An even smaller percentage of investors know how well their portfolio is performing with respect to an appropriate benchmark. The third measure, risk of portfolio, reduces the percentage to […]
Retirement Planning Mistake #8
Over confident and lacks patience. Over confidence and lack of patience manifests itself in a number of ways. If you think you can beat the market by picking individual stocks, be very careful. If you want to test your skills, set up two portfolios. Use a passive approach with one and build it along the […]
Retirement Planning Mistake #7
Lack of Portfolio Plan Do you have a portfolio plan and is it written down? If you can lay your hands on a plan, you are a rare investor. What is involved in specifying a Strategic Asset Allocation plan? A portfolio plan will first of all identify all the asset classes that are to be […]
Retirement Planning Mistake #6
It is a mistake to think your portfolio is properly diversified simply because you have chosen stocks or index funds across differing sectors. That’s not enough. Investing across all sectors will not coverall asset classes, but investing across all asset classes will cover all sectors. There is a big international world out there. Don’t neglect […]
Retirement Planning Mistake #5
Investors pick individual stocks to build portfolios rather than use index funds. Our preference is to use commission free ETFs. Next to not following “The Golden Rule of Investing,” the error of not using index funds is likely the biggest mistake investors make. Remember – The Market is smarter than you are. While there are […]
Retirement Planning Mistake #4
Investors lack knowledge about the importance of asset allocation. Investors do not educate themselves as to the importance of asset allocation, and what asset classes tend to perform better than others over the long-run. I need not go into the importance of overcoming this mistake as I have written extensively about this possible mistake. […]
Feynman Portfolio Study: Final Summary
The purpose of the Feynman Study was to take a list of 18 diversified assets and to demonstrate how that list could be used to construct portfolios based on a number of different strategies: Passive (Buy and Hold) Strategic Asset Allocation (SAA) Strategy; Active (Buy…..Don’t Hold) Tactical Asset Allocation (Re-Balance) Strategy; “Classic” US Equity/US Bond […]
Retirement Planning Mistake #3
Many investors are too conservative at an early age. In other words, they are “stock market shy.” Don’t load up your portfolio with bonds when you are in your twenties and you have forty years to save. Let me illustrate this mistake with a real example. Husband and wife saved identical amounts during their […]
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