Invest

When Investing, Stick to What You Know

Warren Buffett can always be counted on for great sound bytes that offer sensible advice for every investor. While not as pithy as some of his other statements, his advice that you shouldn’t invest in any business that you don’t understand is so obvious that it’s easy to lose sight of its wisdom. Buffett is […]

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Are Your Actively Managed Funds Beating the Index?

We’re constantly discussing ETFs/index funds and actively managed mutual funds even though the comparison is so unflattering to actively managed funds. But don’t take it just from me. You need to do your own research on the performance comparisons. By and large, what you’re going to find is that very, very few active funds consistently […]

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Ask the Readers: Do You Invest in Active or Passive Funds?

We’ve been focusing a lot recently on investing, with the basics of assets like ETFs, trading vs. investing and even hedge funds. With the stock market essentially on sale right now, it’s a great time to be investing — but it obviously matters what you’re buying. I’m a big fan of index funds, especially since […]

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The Pros and Cons of Exchange-Traded Funds (ETFs)

Exchange-Traded Funds (ETFs) are, as their name implies, funds that trade on an exchange. Traditionally, ETFs have been baskets of stocks that track broad indices. More recently, ETFs have launched that track exotic strategies or asset classes with the goal of allowing retail investors to participate in institutional strategies. Why ETFs? The ETF structure is […]

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Is it Time to Regulate Hedge Funds?

Banks are essential (but troublesome) institutions that keep checking accounts for depositors, but only hold a fraction of deposit liabilities in reserve to pay for checks. Normally, 15 cents on the dollar is adequate reserves for banks because those writing checks will about equal to those making deposits. To ensure banks have enough reserves to […]

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Keeping “The Market” In Perspective

I have to admit to an interest in the equities market that borders on the unhealthy. I’m well aware that, over the long term, saving and buy-and-hold investing are the keys to growing personal wealth. But still, like a siren call, the excitement and adventure of short-term trading is a seductive distraction. Like any vice, […]

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Investing vs. Trading: Which Are You Doing?

“Investing” is one of the most misused words in our language, especially when talking about finances. Oftentimes, people use the word “investment” in a non-financial sense when purchasing something whose value is liable to depreciate, such as “I finally invested in a new laptop.” But when it comes to the stock market, there’s a difference […]

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Investors Switching to Index Funds – Big Time

As investors come to realize that active fund management often underperforms passive strategies, they’re switching to index funds — in droves. More than 20% of U.S. institutional investors have moved money from active management and into index funds, according to a recent survey by Greenwich Associates. While the consulting firm says it’s “not yet clear” […]

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The Snowball: Warren Buffett and the Business of Life

The Snowball: Warren Buffett and the Business of Life, is one of the latest books on the investor-financier, written by the Wall Street Journal’s Alice Schroeder. It’s an odd title for a biography, but apparently an analogy to the accumulation of compound interest in that rolling a snow ball makes it bigger. It was published […]

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Please Ignore This Advice

Remember how most fund managers can’t offer you anything except lower returns and higher fees? Well, in response to the economy, more fund managers are beginning to actively manage their clients’ accounts — and abandon the tried-and-true strategy of buy-and-hold. From the Wall Street Journal – Advisers Ditch ‘Buy and Hold’ For New Tactics (via […]

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The Secret Fund Managers Don’t Want You to Know

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If your investments are being actively managed, your fund manager is likely keeping a big fat secret from you. He doesn’t want you to know it, because he’d lose your business. But it’s costing you money every day — your money. The secret? Most active managers can’t even top the index they’re trying to beat. […]

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Why Index Funds Are Your Best Retirement Option

When it comes to picking your investments for your retirement accounts, you may or may not have a choice. Most likely, your company’s retirement plan limits — or heavily suggests — what you should invest in. But for your Roth IRA, you have the freedom to determine where your money is going. If you’re looking […]

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