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When it Comes to Investing Biases, Some are Harder to Overcome than Others

By |2022-08-19T17:15:45+00:00February 1, 2022|Financial Market, Investment Management, Theus Wealth Advisors|

It’s not controversial to say that investing biases can hurt the performance of your portfolio. Most investors would agree. And yet by its very nature a bias—an unreasoned opinion—will often be invisible to the person holding it. You can find evidence of this in a recent DALBAR, Inc. study of investor behavior. Researchers found that over the 20-year period ending December 31, 2020, individual stock fund investors consistently underperformed a market benchmark index. During the studied period the S&P 500 had an average annualized return of [...]

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Gaming is No Fun When You’re Losing Lots of Money

By |2021-11-09T13:57:01+00:00November 9, 2021|Financial Market|

One of the oldest tricks in the arsenal of the professional card shark is to let the “mark” win. It might be just a few hands or it might be a series of games over weeks. Whatever it takes to make the victim think he’s on a hot streak. And whether he thinks it’s due to skill or just luck, the perceived success convinces him he needs to keep going to win all he can. But in the end he will lose spectacularly, because the card [...]

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What’s the Difference Between Investing and Speculating?

By |2021-11-02T13:10:00+00:00November 2, 2021|Financial Market, Investment Management|

The words “speculating” and “investing” often get used interchangeably. And that’s not surprising, since they describe somewhat similar concepts. In both cases, you are laying out money with the hope of gaining a return in the future. And to muddy the waters further, marketers are prone to use the words to either cast aspersions on or bring legitimacy to products. “Don’t speculate on the stock market. Instead, invest in these collectible coins.” Most people will tell you that if you put money into something hoping for [...]

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Free Trade Among the Ghosts and Goblins

By |2021-10-26T12:49:43+00:00October 26, 2021|Financial Market|

Halloween, as comedian Jerry Seinfeld pointed out, is the best possible holiday a child can imagine. You simply go door-to-door and the neighbors give you handfuls of candy for free. But according to Kerry McDonald, trick-or-treating and the extensive trading of candy afterwards illustrate several important principles of a free market. The very concepts that make investing for retirement possible. A Senior Education Fellow at the Foundation for Economic Education, McDonald has four children of her own who she’s seen conduct extensive candy trades among themselves, [...]

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Skip this Movie: Why This Year’s Top-Performing Stock is a Good Example of Misguided Speculation

By |2021-09-28T10:01:53+00:00September 28, 2021|Financial Market, Investment Management, Theus Wealth Advisors|

Crime novelist Catherine Aird observed, "If you can't be a good example, then you'll just have to be a horrible warning." This seems to be the role of AMC Entertainment, the movie theater chain whose stock has soared in recent months. Earlier this year, as pandemic restrictions took their toll on in-person entertainment businesses, AMC stock was trading at less than $3 per share. But over the next six months, in an unusual turn of events, the stock increased dramatically to trade above $60 per share. [...]

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Two scary things about the Colonial Pipeline hacking

By |2021-06-13T13:13:20+00:00June 13, 2021|Financial Market, Theus Wealth Advisors|

You might have heard about the gas shortage that occurred in early May due to the infection of Colonial Pipeline’s computer systems with ransomware, courtesy of unnamed hackers. This incident is just the most recent in a growing number of cyberattacks on cities, schools, and even hospitals - the aim being to infect a computer with a virus that scrambles the data and extorts payment to decrypt them again. In the case of Colonial Pipeline, Russian hacker group Darkside stole about 100 gigabytes of data and [...]

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What a Difference 8 Months Makes

By |2020-11-13T12:51:36+00:00November 13, 2020|Financial Market, Theus Wealth Advisors|

Scrolling through pictures on my phone from about a year ago, I came across this stunning reminder of what a wild ride the last 13 months have been. That evening, I literally paused the broadcast to take a picture of my TV screen. It was March 13, 2020. The headlines were catastrophic. So, as we journey together down the path of investment prudence and discipline, please consider these Ten Timely Takeaways: Acknowledge emotions – they’re not right or wrong; they’re real. History’s lesson isn’t to avoid [...]

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How bad is buying at the peak of the market?

By |2020-09-13T13:14:36+00:00September 13, 2020|Financial Market, Theus Wealth Advisors|

Roy Sullivan was enjoying a quiet Saturday morning of trout fishing when the lightning bolt struck. It hit him on the top of his head and exited his lower body, causing burns down his chest and abdomen. Stunned by the strike but still alive, Sullivan was returning to his car when a black bear charged out of the woods and tried to steal his string of freshly-caught fish. This was the seventh documented occasion that Roy Sullivan had been struck by lightning. If you wanted to [...]

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New Investment Rules for Retirement Investing

By |2017-06-08T09:00:18+00:00June 8, 2017|Financial Market, Investment Management, Retirement Income Planning, Uncategorized|

On June 9, the U.S. Department of Labor’s Fiduciary Rule—the most famous and controversial set of investment regulations you’ve probably never heard of—is going to start taking effect. The rule promises better protection for investors who employ financial advisors to help manage their retirement accounts, including rollovers into an Individual Retirement Account. The Fiduciary Rule has been debated for years. After the financial meltdown in 2008, when investors lost so much money, there was a populist movement to force corporations to become more transparent about their [...]

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Investment Demons: Are you a Self-Deceiver?

By |2016-03-11T16:06:30+00:00March 11, 2016|Financial Market, Portfolio|

Investment Demons: Are you a Self-Deceiver?   I've mentioned this before in relation to long-term investment strategies: Sir John Templeton (the father of international investing and considered one of the great investment icons of the twentieth century) often advised that you have to look foolish (sometimes even stupid) in the short-term in order to look brilliant in the long-term. What the gentleman was essentially referring to was the internal strength to maintain one's investment discipline and philosophy in the face of the inevitable bad times that [...]

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