Tag Archives | equity market

The Return of Volatility

During May, the worlds capital markets saw a sharp increase in volatility that was accompanied by falling prices. Importantly, successful long-term investors are able to put short-term negative events into perspective and that allows them to capitalize on the long-term returns offered by stocks. This blog post offers evidence that short-term negative results are not […]

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Understanding “Value” Investing

Value stocks or mutual funds comprise a key element in many investors’ portfolios. But what does value mean? What distinguishes value stocks from all others, especially growth stocks? Every value stock has its own story, but the common elements connecting all value stocks relate to price and risk. Price: Value stocks are often referred to […]

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Why Is The Average Investor’s Performance So Poor?

The data is conclusive. The average investor’s returns are, umm, below average. How can this be? What appears to be statistically impossible is due to two basic factors, investment discipline and costs. Over the last 20 years, the average stock investor earned 3.49% compared to the S&P 500′s return of 7.81%. A $100,000 investment in […]

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The Perils of Market Timing: Part 2

For many investors, the temptation to try to time the stock market is irresistible. However, for most investors, market timing is as dangerous as it is irresistible. In my last market timing post, I discussed the downside of missing a few good return days. In this post, I discuss the downside of trying to time […]

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The Perils of Market Timing

Missing just a few days of high returns in the stock market can substantially erode long-term performance. The harsh reality of market efficiency has not stopped speculators and other traders from attempting to read the future. On paper, market timing offers a seductive prospect: By predicting market direction ahead of time, a trader might capture […]

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Risk, Volatility and Opportunity

The current renewed volatility in financial markets is reviving unwelcome feelings among many investors – feelings of anxiety, fear, and a sense of powerlessness. These are completely natural responses. Action on those emotions, though, can end up doing us more harm than good. The increase in market volatility is an expression of uncertainty. The sovereign […]

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