Discover some of the most common mistakes when selling put options and tips that you can use to avoid them.
by Jesse Anderson, CFA® Last weekend a long-time friend said to me: “I cashed out my entire 401(k) before the tech bubble, and Thank God!, because I would have lost everything.” My friend is so proud of his decision that he’s still bragging about it over 10 years later. I did not have the heart to tell him that his …
“Part of being a good investor is accepting uncertainty.” – Kurt Shrout, Minimizing Cash is King
With markets reaching all-time highs, I’ve seen many articles discussing the role of cash in a portfolio. I believe one of the biggest reasons investors have moved a considerable portion of their portfolios to cash is certainty. In making this decision, some investors may not fully consider these different
Exchange Traded Funds, more commonly known as ETFs, celebrated their 20th birthday on January 29, 2013. SPY, an ETF that tracks the S&P 500, was introduced to the market on January 29, 1993. Today, the ETF industry is booming with thousands of different funds and over $2 trillion in assets.
What do you want for Christmas? This is a common question we likely all hear from friends and family this time of year. While I doubt any of us will be creating a Christmas list to send to Santa, we all have secret wishes or cravings that would put a smile on our face Christmas morning.
Thanks to the Dodd-Frank Act, the U.S. Securities and Exchange Commission (SEC) conducted a study of the existing level of financial literacy of retail investors. To no surprise to us at Snider Advisors, the study found most investors have “a weak grasp of elementary financial concepts.” This is the biggest reason we made financial education a critical component to our approach to investing. (If you are interested in the full report, you can find the 200+ page document here.)
Here is a great graphic outlining the emotional cycle investors struggle with year after year. When I discuss these factors with prospective clients most react by saying, “I’m smarter than that!”, “This time is different.”, or “That won’t happen to me.” You must first recognize your mistakes before you can avoid them in the future.
A client recently asked a great question, “What is our ‘Plan B”? I think part of the question stemmed from the idea that if we aren’t reacting to the market and its changes, we are doing something wrong. Adjusting our investments or calling an audible in the middle of the process makes investors feel good. Just like nearly every other decision, the change is driven by emotions yet investors fail to realize it. After the change, they normally come out feeling the portfolio is much ‘safer’ now, or they can make a whole bunch more money. (Fear & Greed) Rarely will an investor go back and evaluate previous decisions to decide whether or not it was advantageous in the end.
Investors make the same mistakes over and over again. They are all well documented, but rarely do we try to recognize our errors, evaluate the decision making process, and finally, avoid the mistakes in the future. One of my favorite financial bloggers, Barry Ritholtz, recently wrote an article for The Washington Post listing Investors’ 10 Most Common Mistakes. Here are three and how we combat these mistakes with the Snider Investment Method.
I recently read an article on the Top 9 Questions Potential Clients Ask Advisors. Having been in many meetings with potential clients, some of these are more common than others. Overall, I thought it was a great list for someone interviewing potential advisors. I’ve never had to sit on the other side of the table in one of these meetings, but these are questions you should ask and answers you should know about your investment advisor. Here are my responses to the top questions: