Investor Behavior

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Market Corrections, Bear Markets, and Recessions: A Primer

As the markets continue to move up and down and as the media continues to have a field day playing with our emotions, it is no wonder that many investors find themselves questioning what lies ahead.  While no one can predict what the markets will do or how people will react to the news of…

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What is Tracking Error Regret?

A central tenet of our investment philosophy is diversification. Furthermore, we advocate for “real diversification”, which means owning thousands of stocks in companies of all sizes (large and small), geography (U.S. and non-US) and investment style (value and growth).  This type of diversification represents the only “free-lunch” there is in investing. But real diversification also…

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Three Reasons Not to React to Financial News

Stock prices change as new information becomes available.  It’s not surprising that many investors believe that it is crucial to follow financial news carefully and then act quickly on news that might be relevant to their investments.  While this may sound like a good idea, the reality is that you cannot expect to consistently improve…

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Rising Interest Rates and Your Investment Strategy

It’s been approximately a decade since the Great Recession began. By year-end 2008, the Fed had lowered the target federal funds rate to almost zero and embarked on an aggressive quantitative easing campaign. Now, after several years of economic recovery, the Fed has begun to reverse course, restoring its policies and targets closer to historical “norms” through quantitative tightening and gradually rising interest rates.

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Handling Market Volatility

Over the past few weeks, markets have been experiencing more volatility than what so many have come to expect as the norm and what has characterized the markets over the past several years. It is ironic because when it comes to investing, it is market volatility that is actually the norm – what we have experienced over the last several years is what is unusual.

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Our Take on Current Market Conditions

As a fiduciary advisor, you might already be able to guess what our take is on current market news: Unless your personal goals have changed, stay the course according to your personal plan.

Still, it never hurts to repeat this steadfast advice during periodic market downturns. After all, we understand that thinking about scary markets isn’t the same as experiencing them. So, what’s going on? Why did U.S. stock prices suddenly drop after such a long, lazy lull, with no obvious calamity to have set off the alarms?

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Perspective

With Hurricane Irma now in the rearview mirror, I can gratefully say how lucky we were. My home sustained minimal damage and we thankfully never even lost power. However, we had no internet, we had no cable, our cell service was spotty at best and we had no landlines. As we were busy trying to regroup and clean up, we learned that our air conditioners had been leaking, our dryer was the victim of a power surge and our pool heater had sprung a leak virtually draining our pool!

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