Why Rebalance?

You probably know that your investment portfolio is being rebalanced on a regular basis, but you might not know why. Is it for higher returns? For maintaining the agreed-upon balance of investments that is in your risk tolerance comfort zone? Does rebalancing help manage portfolio risk?

The answer to the above is “yes,” “yes,” and […]

Portfolio Performance Defined

You receive portfolio performance reports every three months—a form of transparency that financial planning professionals introduced at a time when the typical brokerage statement was impossible to decipher. But it might surprise you to know that most professionals think there is actually little value to any quarterly performance information, other than to reassure you […]

Low Cost, More Demand

The average investor isn’t stupid. The latest evidence comes from a look at where investors are putting their money, taken by the Morningstar mutual fund data organization.

Morningstar found that when they ranked funds by how much they cost their investors, from the top 20% to the bottom 20%, they found that the lowest […]

The Paris Attacks

 

Most of us watched news coverage of the multiple terrorist acts against the city of Paris, France, with a mixture of horror and dread. The horror was our usual response to terrorism, the feeling that arises when we ask ourselves: how can people think this way? And when we realize that, somehow, there […]

Index Churning

 

Most people think of the major stock indexes as a stand-in for a certain sector or category. The S&P 500 represents large companies, the Russell 2000 tells you what small capitalization stocks are doing, and the Dow represents broad economic sectors. Look at tables showing the return of these indices over decades of time, […]

The New Largest IPO in History

 

Last fall it was Twitter. Before that, it was Facebook. Now it’s Alibaba, the huge Chinese e-commerce company that just became the largest tech IPO in history, after raising $21.8 billion in its initial public offering on September 18.

As it turns out, Facebook and Twitter turned out to be decent investments at their […]

What? I Can’t Have My Money Back?

 

Most investors either have now or have had money invested in the cash-equivalent known as money market funds. Few have noticed that recent regulatory changes could expose some of the underlying volatility of these safe investments, and even affect whether you can get your money back when you need it.

Money market mutual funds […]