Posts filed under “Investing”

Jason Zweig’s Rules for Investing

Coming up this week for our Masters in Business podcast, I am sitting down for a conversation with Jason Zweig.

One of my favorite books of his is Your Money & Your Brain. Buried within its appendix is a great list of common sense rules that are commonly ignored. Perhaps I can find a few questions here to go over this with him.


Jason Zweig’s Rules for Investing

1. Take the Global View: Use a spreadsheet to track your total net worth — not day-to-day price fluctuations.

2. Hope for the best, but expect the worst: Brace for disaster via diversification and learning market history. Expect good investments to do poorly from time to time. Don’t allow temporary under-performance or disaster to cause you to panic.

3. Investigate, then invest: Study companies’ financial statement, mutual funds’ prospectus, and advisors’ background. Do your homework!

4. Never say always: Never put more than 10% of your net worth into any one investment.

5. Know what you don’t know: Don’t believe you know everything. Look across different time periods; ask what might make an investment go down.

6. The past is not prologue: Investors buy low sell high! They don’t buy something merely because it is trending higher.

7. Weigh what they say: Ask any forecaster for their complete track record of predictions. Before deploying a strategy, gather objective evidence of its performance.

8. If it sounds too good to be true, it probably is: High Return + Low Risk + Short Time = Fraud.

9. Costs are killers: Trading costs can equal 1%; Mutual fund fees are another 1-2%; If middlemen take 3-5% of your cash, its a huge drag on returns.

10. Eggs go splat: Never put all your eggs in one basket; diversify across U.S., Foreign stocks, bonds and cash. Never fill your 401(k) with employee company stock.


Great stuff!

Category: Books, Investing, Psychology, Rules

Five things you can do to get your financial house in order

A rollicking week in the markets is really a chance to clean up your act Barry Ritholtz Washington Post,  August 28 2015       Don’t say you weren’t warned. A few months ago, with markets on a hot streak, you were given the Solomonic heads-up that “this, too, shall pass.” Your portfolio was basking in the…Read More

Category: Apprenticed Investor, Asset Allocation, Index/ETFs, Investing

Bloomberg TV: Evaluating a Volatile Market

Evaluating the state of the markets and the potential timetable for a Federal Reserve rate hike.

Panic or Profit: Evaluating a Volatile Market

Source: Bloomberg, September 2, 2015 1:38 PM EDT

Category: Investing, Media, Video

Are You a Trader or an Investor?

At the risk of overstating the obvious, there are important differences between traders and investors. Their timelines differ, as do their goals, preferred assets and methods. Yet some of what I have been hearing from members of each group suggests they themselves can sometimes become confused about these dissimilarities. Blame the recent market volatility for…Read More

Category: Asset Allocation, Investing, Psychology, Really, really bad calls, Trading

Investors: Another Chance to Clean Up Your Acts

      My Sunday Washington Post Business Section column is out. This morning, we follow up a June column that advised taking advantage of markets at all time highs to clean up your portfolios. This time out, we look at the market turmoil as a reminder, and the snapback rally as an opportunity. The print version…Read More

Category: Apprenticed Investor, Asset Allocation, Investing, Really, really bad calls, Trading

What If They Threw a Panic and No One Came?

Source: Bianco Research     “Its enough to give a long-term investor some hope for the future of finance.”   Here’s a bit of role reversal for you: Mom and Pop were content to ride out the market’s volatility this past month, more or less sitting tight. Meanwhile, the pros were driven to the point…Read More

Category: ETFs, Investing, Psychology, Sentiment

How exposed are American households to the stock market?

This is fascinating look at how exposed the average American household is to the equity markets. On average, about 55% of adults have equity exposure, and it amounts to less than 15% of their total assets. I’d wager that is a very top heavy distribution both in percentage and asset size.   Source: The Economist…Read More

Category: Investing, Markets, Wages & Income

Data Points to Ponder During Today’s Selloff

China’s markets set the tone for the day (and perhaps the week) with an 8.5 percent blood-letting. Global stocks followed suit, which came after last week’s 5 percent tumble. Rather than tell you that markets are oversold — you already know that anyway, and oversold markets can become even more oversold — I want to bring a…Read More

Category: Investing, Markets, Sentiment

Alpha & Beta: Two Competing Investment Philosophies

The best investment strategy for you? It’s the one you’re likely to stick with. Barry Ritholtz WaPo, August 16, 2015   “Where’s the Dow going to be in a year?” That’s often asked of financial TV guests. From their responses, you’ll detect two distinct investment philosophies emerge. Which answer resonates with you most strongly probably…Read More

Category: Asset Allocation, Investing, Philosophy

What’s Your Investing Philosophy?

    My Sunday Washington Post Business Section column is out. This morning, we look at two competing investment philosophies, Alpha & Beta. The print version had the sort of misleading headline Be the guy with the calm and collected investing strategy – I much prefer the online version’s The best investment strategy for you? It’s the…Read More

Category: Analysts, Asset Allocation, Financial Press, Investing, Philosophy