The rally that has taken hold this year has been very strong, but equally perplexing. As discussed in recent articles, it has come amidst falling earnings expectations, warnings from the bond market, and mixed economic data. In addition, this move higher has come as investors move money out of equities …
Article Category: Risk
With each and every investment that you make, you're going to be giving up one benefit in exchange for another. Most of the time, this trade-off is between risk and potential return. Understanding this trade-off at a conceptual level will go a long way in helping you to select the right investments (or strategies) on your path to retirement.
The unfortunate reality is that nothing in this world is certain. In fact, the only thing in life that is certain ... is that nothing is certain. This is especially true when we talk about money and investing. Since we can't deal with certainties, we're forced to deal with probabilities. Therefore, probabilities become the lens through which we must view all things investment related.
For most investors, the idea of "getting out at the top" is as illusive an idea as winning the lotto, or licking your elbow. The chances of picking that one magical day just seem too low to be probable. But is it really that tough? Or do most investors simply have a poor understanding of how stock market tops develop?
The age-old idea of not having all your eggs in one basket is considered timeless wisdom, but could it be working against you? In truth, diversification is a double edged sword. The benefit that it provides comes at a mighty cost. When it comes to investing, most individuals aren't aware of the hidden price they pay for this so-called "free lunch."