Secure Document Sharing
A wealth of information at your fingertips.
Investment Basics Series: What Is Rebalancing?
What is rebalancing? Why and when should an investor do it? “Buy low, sell high.” The expression is so familiar that it’s become a cliché. And yet, few investors actually follow this most basic advice. Instead, they panic and sell (low) during market crises, and chase already-hot stocks at premium (high) prices. Deliberate rebalancing is one of the best ways we know of to more consistently buy low and sell...
Investment Basics Series: What Is Diversification?
What is diversification and why does it matter to you as an investor? Risk, Return and Diversification If market risk is the fuel that drives expected returns, diversification is your steering wheel for navigating more assuredly toward your desired destination. As we covered in our last post, if you want to earn a return on your capital, you must put it to work in one or more markets. This also means you...
Investment Basics Series: What Are Market Risks?
What are market risks, and how should you approach them an investor? Nothing Ventured, Nothing Gained We’re all familiar with how risk is a double-edged sword. Those who are willing to take on daring risks improve their odds for reaching the greatest rewards. But they also can fall the hardest by stretching beyond the safety net of the status quo. In investing, this means that market risk can be your strongest...
Investment Basics Series: What Is Asset Location?
What is asset location and why does it matter to you as an investor? Let’s begin by noting that asset location should not be confused with asset allocation, which we addressed in last week’s post. The two are related, but each makes its own contribution to your investment experience. Asset allocation (as described here) is about spreading your money among different asset classes, based on the amount of market risk and...
Investment Basics Series: What Is Asset Allocation?
What is asset allocation and why does it matter to you as an investor? In last week’s Investment Basics Summer Series, we defined asset classes as categories (classes) by which we organize individual securities (assets) that share significant factors. To review: There are broad asset classes for stocks, bonds and real estate. Within these broad classes, there are narrower ones based on company size and certain business metrics for stocks, and on...
Investment Basics Series: What Is an Asset Class?
What is an asset class, and why does it matter to you as an investor? Asset classes are categories (classes) by which we organize individual securities (assets) that share significant factors. Significant factors are the ones that help us associate an investment with a particular level of risk and expected return. For example: Significant – Stocks vs. Bonds: Owning (stocks) is inherently riskier than lending (bonds). That’s why stocks and bonds...
Investment Basics Series: Why Invest to Begin With?
As we kick off our Investment Basics Summer Series, we’ll lead with the most important question of all: Why are you investing to begin with? It’s common for advisers and investors alike to rush into talking terminology and leveraging logistics, without first setting the all-important stage. Maybe it’s human nature to want to get right to the task at hand, and why many financial folk seem far more comfortable discussing...
Some Perspective on the Greek Debt Crisis
If you’re wondering whether there’s something that you, as an investor, should be doing in response to the Greek crisis, here are some points to bear in mind. First, as always, we don’t know what the future holds, for Greece or anywhere else. Even more to the point, we don’t know how the market will react to whatever does happen in Greece. This is why we advise those who already have a...