Look at your investment portfolio. Do you have exposure to real estate? Is your exposure broad or is it limited to just one company?
Some individual investors feel they don't need to own real estate inside because they already own a home or condominium. Some may even a vacation home or rental... Read More
As U.S. stocks register new highs and bond yields register new lows, the exchange-traded fund (ETF) marketplace keeps humming along. This is true of ETFs in virtually all asset classes, including not just equities (NYSEARCA:SCHB), but currencies (NYSEARCA:FXE), commodities (NYSEARCA:DBC), and... Read More
With 2016 officially half over, the celebratory nature of the stock market is being masked by another telling trend: Defensive sectors are outperforming higher risk areas.
Formerly hot groups drenched with elevated risk like solar energy (NYSEARCA:TAN) and biotechnology stocks (NasdaqGS:IBB)... Read More
In retrospect, Brexit turned out to be more meaningful than Grexit. And while the immediate reaction of global financial markets (NYSEARCA:VT) to the England's decisive vote to leave the European Union (EU) was negative, it's a stark reminder of why investing without a margin of safety is... Read More
Higher investment risk leads to higher investment returns, right? It's a Wall Street axiom that we've heard so many times it's become ingrained in us. But conventional wisdom and reality have the peculiar habit of departing from one another. And what's happening in 2016 is a noteworthy example of... Read More
Currency prices go up, they go down, and sometimes they crash. And just like other financial markets, currency prices are not immune to volatility. Should you be hedging your portfolio against currency volatility?
The first argument in favor of currency hedged investments is that... Read More
I've written extensively about the role of an investor's non-core portfolio. It's one of the three cornerstones of a well-built portfolio (see figure below) and it always plays a complementary role to the much larger core portfolio and a person's margin of safety container. If used properly, the... Read More
The phrase "past performance is not an indicator of future performance" is a frequently written and spoken legal disclaimer for virtually all investments sold by Wall Street. Yet, hardly anyone from individual investors all the way to investment sales people really act like they believe... Read More
Do stock market correlations matter?
Statisticians use correlations (or cross-correlation) to measure the relationship between asset classes or investments. The general idea is to better understand the similarity or dissimilarity in how investments perform against each other and to build a... Read More
Never mind the abysmal results of first quarter earnings for the depressed energy sector. It doesn't matter.
And never mind the conventional wisdom of group-think and scary analyst warnings like, "Energy stocks are in deep trouble because Q1 losses will mark the first time any sector in the... Read More