Investment Planning

What a start to the New Year. In the first two weeks of trading, the S&P 500 Index has plummeted 8% on the year. Will next week bring us into correction territory, a 10% decline? Is a bear market (a 20% decline) a possibility?

What’s the goal of investing? Many investors will simply answer, “Returns.” Or, more specifically, “Better returns.” But how do you measure returns? The answer is not as straightforward as you might think. What’s the benchmark? The S&P 500? What if your portfolio is nothing like the S&P 500? What if you have a substantial allocation to bonds?

The international markets lagged the US market by a significant margin in 2014. In fact, they have lagged in recent years.

To answer this question I want to clarify that we are talking about an actual human advisor and not automated financial advice or a “robo advisor.” Also, we’re addressing more that returns.

Unless you are very rare, we all make mistakes. The important thing is that we learn from them. And I thought you might enjoy reading about lessons from some of the most common investment mistakes:

What does market volatility have to do with biology? According to John Coates, former Wall Street trader turned neuroscientist, and author of The Hour between Dog and Wolf, plenty.

’Tis the season for market predictions. Of course, I’d categorize this annual spate of magazine articles under the heading of “fantasy” rather than “finance.” Not unlike weather forecasts, market predictions—even those from reputable sources—are wrong more often than they are right.

If a picture is worth a thousand words when it comes to investing the Callan Periodic Table of Investment Returns (See image below) is worth one million.

“In an uncertain world statistical thinking and risk communication alone are not sufficient.

Patience is a virtue. And nowhere is that more true than in the investment world.