Are Markets Rational or not?

SmartStops comment:   Glad to see Richard Thaler win the 2017 Nobel Prize for documenting the way people’s behavior actually does not conform to economic models that portray them as perfectly rational.  As he states:  (Investors) “refuse to cut their losses on plummeting investments because they won’t own up to mistakes”. Ironic though that in 2013 they awarded it to Eugene Fama for arguing that financial markets are...

DIY’er investors are doing better then clients of Financial Advisors!

SmartStops comment:  just came across this interesting point that indicates the DIY’ers are doing better then clients of Financial Advisors:  .. These added services (education etc. from brokerage) seem to be helping, as self-directed investors tend to see quite a bit of success, even outperforming investors with financial advisers in many cases. According to SigFig, a website that helps investors manage their money, investors who were...

The Higher They Climb, The Harder They Fall

SmartStops comments:   It’s befuddling that this statement continues to get touted around – “But isn’t this market timing? We all know, after all, that timing the market is pure folly!” .. when indeed guru’s like Andrew Lo, MIT have blown this “myth” apart again and again. Now the below is a very true statement and why active risk management is indeed the smarter way to protect gains in our 21st century...

Less Risk. More Caution.

LESS RISK.  MORE CAUTION.    Good point by Howard Marks of Oaktree Capital on the markets these days:      “It’s all about investors’ willingness to take risk as opposed to insisting on safety. And when people are willing to take risk , and not concerned about safety , that’s when I get worried”.   see entire article at:  https://www.oaktreecapital.com/insights/howard-marks-memos

Lessons From a Trading Great: Stanley Druckenmiller

SmartStops comments:  If you study successful investors, you will find that they don’t necessarily follow a diversification rule.  That was created many many years ago with the advent of Modern Portfolio Theory however even MPT has morphed now.  Read more about some of the limitations of diversification to minimize risk. If you use tools like SmartStops Jow Much to Buy Calculator for proper position sizing  and SmartStops Risk Alerts, you...