Risk Management

These good times are here to stay, right?

“Some people will look at past performance and extrapolate what has happened out into the future. They think the recent trend of good performance will continue without interruption, and they jump in because they want a piece of the action too. But trends don’t last forever. Just because an investment has already appreciated is no…

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Also posted in All Columns, Planning Encyclopedia, Retirement Planning |

Using leverage to help reach your financial objectives

“Used wisely, leverage can help you reach your financial objectives. But you do want to make sure the idea fits your situation, and that you understand the entirety of the strategy, including what could be daunting levels of risk. Certainly, you can cut a lot of wood in a short period of time with a…

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Also posted in All Columns, Investment Management |

Are precious metals still precious?

“Precious metals, especially gold, have a reputation for being a hedge against inflation. This reputation, however, is difficult to support. Gold has had a surge lately, and there is a tendency to take recent results and extrapolate them. But the reality is that gold has a 200-year history of abysmal long-term returns, briefly punctuated by…

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Also posted in All Columns, Investment Management |

The cycle of market emotions

“Buying low and selling high is intuitively rational. But, often, that’s not what people actually do. There’s overwhelming evidence that many people seem to be hardwired to do just the opposite: to buy an investment after it has already appreciated only to sell the same investment if it goes down in price. So why do…

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Invest as if…

“When Black Monday happened, the people that had a long enough time frame to wait it out until the recovery were probably fine. In fact, despite Black Monday, the American markets actually finished 1987 in positive territory. But anyone who held long-term investments with a short-term mindset might not have been able to stick around…

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Also posted in All Columns, Investment Management |
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