What were you thinking in 1986?

In spite of all these economic and political issues the S&P 500, including dividends, has still returned nearly 10% over the period. Nonetheless, most investors did not experience this level of returns because they let their emotions drive them in and out of the stock market at inopportune times.

The Hazards of Market Timing

For as long as markets have been around there has been a subset of participants that believe they can outsmart the market. These investors are frequent traders that believe they can consistently time the market to buy low and sell high. Over the years investors have developed many techniques from the fundamental analysis of companies’ financial statements to drawing lines across charts of a stock’s historical price movement. Do these techniques work in the long term? The data suggest they do not.

How to manage stock market volatility in retirement

In retirement, one of the scariest things, particularly when you are dependent on your investment portfolio for a large portion of your retirement income, is how to deal with the ups and downs of the stock market and the economy. You may believe that, in order to do that, you have to be able to get into the market as …

On Randomness

One of the most fundamental and most difficult concepts for investors to wrap their brain around is the randomness of markets. This is most likely because, as Terry Burnham ably shows us, in Mean Markets and Lizard Brains, humans are just not wired to deal with probability and randomness. In the investing classic, A Random Walk Down Wall Street, Princeton …