Avoiding Investment Mistakes
Nobody wants to make investment mistakes. And yet, we’re human; mistakes happen. Here’s how to minimize the ones that matter the most, and make the most of the ones that remain. Bad Decisions vs. Bad Outcomes First, let’s define what we’re talking about: Investment mistakes happen when you make bad decisions, regardless of whether the outcome is good or bad. Bad decisions are the ones a rational investor would not make. For example: Failing to spread your risks around: Concentrating in too few securities, instead of diversifying across many, and many types of investments. Confusing speculating with investing: Chasing or …
ShankerValleau 360°- Investing through Good Times and Tough Times
In the last few weeks, we’ve witnessed the heartbreaking human toll of Russia’s military assault on Ukraine. We’ve also experienced the deluge of financial and economic analyses on its effects on global markets. As The Wall Street Journal’s executive Washington editor Gerald F. Seib reflected, “Russia’s military incursion deeper into Ukraine is one of those rare events that won’t merely affect the world. It will change the world.” We do not know what the future may hold but, as Dimensional Fund Advisors explored in its timely piece, “Navigating Geopolitical Events,” ample historical precedent illustrates what can happen during times of …
Why I’ll Always Be Optimistic About the Market
By David Booth, co-founder and Executive Chairman of Dimensional Fund Advisors It’s hard to believe we’re approaching the end of the second year of this global pandemic. Despite the pain and loss endured by so many all over the world, I hope some positive changes have come from the shock we’ve all been forced to experience. As we look forward to 2022, despite continued uncertainty, I’m feeling a sense of educated optimism that’s stronger than ever before. Why? Because over the past two years, my beliefs have been tested more than ever. And they’ve held up. At the start of …
Lump-Sum Investing vs. Dollar-Cost Averaging – Actual Outcomes
In Part 2, we continue to explore different strategies for investing available cash: Should you invest it all right away as a lump sum? Or are you better off wading in more gradually with dollar-cost averaging? Traditionally, lump-sum investing is expected to generate the highest returns over time. For simple reason, in markets that have risen more, and more often than they’ve fallen, the sooner you deploy your investable assets, the more time they have to grow. That said, general rules don’t always apply to you. Let’s look at when dollar-cost averaging may be preferred after all. Considering the Big …
Lump-Sum Investing vs. Dollar-Cost Averaging – Reviewing Returns
While the words may sound intimidating, the difference between a lump-sum investment strategy and a dollar-cost averaging investment strategy comes down to one simple question, “Should you invest your cash all at once? Or in smaller segments over a period of time?” In the following article we explore the pros and cons of two different investment strategies. Next time you have a lump-sum of investable cash, whether through inheritance, savings, or other means, we hope you’ll feel well informed of your options. As always, every financial situation is unique, please contact ShankerValleau to discuss the right investment strategy for you. …
Is Inflation Jeopardizing Your Financial Dreams? (Part 2)
Inflation is in the headlines and on our clients’ minds. In Part 2 of our two-part inflation series, we explain why forecasts for inflation remain fuzzy and how investors can prepare for a concern that may never materialize. For investors, it’s important to take a step back and look at the big picture before acting on breaking news. But what if inflation does get out of hand, and stays that way for a while? The Federal Reserve has been suggesting rising rates should wane. We hope they’re right. But we also know the future remains uncharted. Nearly any outcome is …
Is Inflation Jeopardizing Your Financial Dreams? (Part 1)
Inflation has been a frequent question in our client financial checkups this summer. The specter of inflation is on everyone’s minds, and rightfully so. As of July 2021, the Consumer Price Index was up 5.4% from 12 months ago. But consumer pricing has been in the headlines since the spring, with eye catching numbers reported as early as May. In this two-part series, let’s take a closer look at what to make of all the commentary, and what you can do about it as an investor. First and foremost, we caution against succumbing to fear or panic in the face …
