The objective of investing is not to make a “big pile of money.” This idea may be startling to many investors. Certainly, making a fortune would be wonderful and most of us would love to have that “problem.” Yet this commonly held goal is rather vague. How much is a big pile, a lot, or even a boatload? What do we need the money for? How much is enough? What are we really trying to accomplish? Without examining these questions, we are pursuing a fantasy, not a clear objective.
In finance, it is generally accepted that there is a relationship between risk and return. If you take a small risk, you expect a small return. Think money market funds that currently yield less than one percent per year. On the other hand, if you are willing to take big risks, you should be able to expect greater returns. Some bank stocks, for instance, are up over 100 percent in just the last few months. However, riskier investments bring a wider spectrum of possible outcomes. You could end up losing more money in a riskier investment, even though you expect to receive a higher return in the future for the risk you have taken. So the time frame within which you need the money becomes very important. Continue reading ‘Why Do I Need a Big Pile of Money?’ »
Posted by Morgan on November 6, 2011 at 12:39 pm under Retirement-Planning.
Tags: Advisors, Money
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From the end of 1999 through the end of 2009, all of the popular Wall Street market performance measurement tools were in the red. The average bloodletting level of the DJIA, the S & P 500, and the NASDAQ was a disturbing-to-some minus nineteen percent.
The Media has dubbed it “The Dismal Decade”.
Most of the investment community is either open-mouthed in shock or strident in blame about the somethings or someones who must be responsible for such horrific performance. Never again they swear to their clients— without ever a hint that they might themselves be the problem.
It won’t be long before the Wizards of Wall Street announce that they have studied the situation, and readied their sales minions to switch the shattered investment public into yet another fail proof (fool-magnet?) portfolio of hedges, gimmicks, signal responders, and panaceas for whatever the new decade brings. Continue reading ‘A Dismal Decade? No Way – Market Cycle Investing’ »
Posted by Morgan on January 7, 2010 at 5:46 pm under Investing.
Tags: Advisors, Asset allocation, Bonds, business cycle, curves, cycle, DJIA, economics, finance, interest rates, investment management, investors, market gurus, nasdaq, s & p, Stock market, Stocks, tax code, treasury bonds, wall street
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