The risk/return trade-off could easily be called the “ability-to-sleep-at-night test.” While some people can handle the equivalent of financial skydiving without batting an eye, others are terrified to climb the financial ladder without a secure harness. Deciding what amount of risk you can take while remaining comfortable with your investments is very important.
In the investing world, the dictionary definition of risk is the chance that an investment’s actual return will be different than expected. Technically, this is measured in statistics by standard deviation. Risk means you have the possibility of losing some or even all of our original investment. View full article »
It’s always good to read some smart investors who did really well in the past. Here are some other lies that investors tell themselves on a consistent basis, including many I’ve told myself over the years:
If only I would have taken my own advice…
I’m not wrong, the market is. You’ll see.
Investing is easy.
I can predict when the next correction is coming.
I’ll be greedy when others are fearful.
I have an accurate discounted cash flow model that tells me exactly what this company is worth.
I know everything there is to know about the markets. View full article »
The most generic question that I have found among the first time investors is how to select the Mutual fund, which fund to invest . Here are some tips that might help you .I do not write much on personal finance, and I doubt how many investors have the visibility on these 7 factors to invest in the mutual funds.
Seven Factors To Consider:
- Management Stability: If you find a great manager, hang on to them. Top managers usually continue to perform better in up and down markets, because they have the stability and experience to stay focused on their objective.Let them work for you and enjoy the stability.
- Management Participation: The management team of a great mutual fund usually invests heavily in their own fund. View full article »
Alternative investments is not a new concept but seems to be gaining momentum, I did a story in back in 2012 under the heading ART TREATED AS AN ALTERNATIVE INVESTMENT .Would like to evolve on those terms, Let’s face it : The financial crisis & the European crisis that seemed to mark a turning point in the spectacular growth of alternative investments, such as managed investments in hedge funds, private equity, real estate, commodities, and infrastructure. Poor performance and liquidity problems led to massive redemption in several categories. By now, however, those problems have subsided, and alternatives are back on track.
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How concerned should we be about the cyclical performance of fund managers or of our own portfolio?
Performance differences, relative to a market benchmark, don’t really matter over the long-term. Short-term (months or years) under-performance is a fact of life if you are trying to beat the market.
Investors are better off investing in an index fund if they can’t deal with this fact. Otherwise, with human behavior being what it is, investors who can’t accept this fact will buy high and sell low –destroying their wealth in the process. View full article »