Low interest rates drive investors a little mad. We divide our money into two buckets—the cash and the portfolio—and then we get jittery if the cash doesn’t seem to be bringing us regular gifts in the form of sweet, buttery interest payments.
It’s the latest gold rush. On September 22, gold traded at a record $1,300 an ounce and holdings in gold-backed exchange-traded products were an all-time high. So far this year, gold is up 18%: ahead of global equities, treasuries and most industrial metals, leading billionaire financier George Soros to state, “Gold is the only actual bull market currently.”
How often you should be reviewing your portfolio depends on how you invest. If you use asset allocation to divvy up your portfolio by asset classes, a yearly check-up may be all you need—just like seeing your doctor for your annual physical. On the other hand, if you own individual stocks, you may want to see how they’re doing every time quarterly reports come out.
One of the primary advantages in mutual fund investing is its simplicity compared to owning stocks — or so some investors believe. It’s true that professional management, diversification, and the ease of reinvesting earnings, are all great advantages. But when you pick one mutual fund over another, are you sure you are getting the fund that offers the lowest fees?
(photo: iStockphoto) One of the unrecognized dangers in the market is found in the attraction of exotic or complex strategies. Newcomers may find themselves drawn to complex (and risky) investments or investing strategies, when in fact they are better suited...
Smart investors use a simple approach to personal investing that delivers the goods: asset allocation. Using asset allocation, you divvy up your investment portfolio among different types of investments (called asset classes) based on the level of risk you’re willing to take.
Most traders have heard of options, but few really understand them. And while the old adage that “a little knowledge is a dangerous thing” applies here, it makes sense to at least have a basic knowledge about options and how they work.
To be a successful investor, you have to recalibrate your brain. You can teach an old dog new tricks—behavioral research shows that you can adopt better habits, and as you do, you build new neural pathways that strengthen that behavior. Each success reinforces your new good habits, and they grow stronger until they eventually become second nature.
There are many investors who, after years of researching and managing their investments, have built up a solid knowledge base of stock or fund picking and are willing to take it to the next level. (Others can simply afford to set aside a certain amount of cash to “play with” on the stock market.) Those people move money in and out of positions on a daily basis — and take their profits from day to day rather than waiting for months or years.