How much “Conviction” do you hold in your investment view?

SmartStops thoughts:    A good behavioral investment blogger wrote:  “The conviction that we express in any investment view reflects our expectations around the likelihood of certain outcomes. We are constantly making judgements that are founded on our subjective belief about probabilities and our confidence in the available evidence. Despite this we seem unwilling to talk in these terms. Instead, there is a tendency to frame investment...

The Truth behind Wall Street Analyst Ratings

SmartStops comments:  Our highly respected cohorts at RealInvestmentAdvice recently published an article which one of the key excerpts from is below.   We couldn’t agree more as we’ve documented to on this page the biasness of analytsts.  also points out their “biasness”.   There basically is little “Sell-Side” coverage and the analysts are always late to the game when moving from a Buy to a Hold or Sell as...

It Does Not Always Pay To Hold On To a Dividend Stock

I love receiving my regular dividend!   That’s what we hear from many investors out there.  “I never want to sell my dividend stock because it is paying a dividend and I don’t want to lose out on that.”  Dividend stock holders love their stocks, and rightfully so.  Dividend stock paying companies are typically ones that are usually managed well, are producing cash, and are thus able to pay a dividend.  Companies such as Coca-Cola, Johnson...

Wash Sale Rule – when does it apply?

The American tax code is one of the most complex and comprehensive set of laws there is and can be quite difficult to understand and navigate. Due to the complexities, many investors have questions regarding how the wash sale rule works and what it is.  Here are two important points to highlight about this rule that we will explain below: The Wash Sale Rule does NOT apply to profits or gains of a sale. Only losses. Though you may incur losses,...

Beware of your own tendencies to “Confirmation Basis” in evaluating your investments

SmartStops comments:  If you haven’t learned yet what behavior finance has proven it’s that “Confirmation bias” is that this fundamental principle applies to investors in notable ways. Because investors seek out information that confirms their existing opinions and ignore contrary information that refutes them, they may skew the value of their investing decisions based on their own cognitive biases. This psychological...