Ah, Rules Based Investing, the magic elixir to investing success! It is the answer to the gloomy conclusions of both behavioral finance scholars and Pogo. Guys with PhDs have taken reams of paper and thousands of hours of computing time to document what Continue reading →
The mere fact that a belief is common and comfortable does not make it true. Accepting such beliefs makes you part of “the herd,” which is good only when the herd is thriving. But when the herd faces serious threats from hostile changes in their environment, whether it’s drought or wolves, the last thing you want is to have your survival tied tightly to the herd’s.
That holds true in investing, as well as in pastures.
Two such errors animate this month’s essay. First, there appears to be Continue reading →
Oddly enough, the most time-consuming part of investing for me is limiting my choices. To simplify and streamline the process, I looked at fund families with top performing mutual funds that are available as no-load funds with low minimum investments through Charles Schwab, Fidelity or Vanguard.
Hedge fund billionaire Ray Dalio, in our Continue reading →
Every strategy should be evaluated not just on a “benefit of being right”, but at least as importantly, on a “cost of being wrong”, basis…
– The Little Book of Sideways Markets, Vitaliy N. Katsenelson
I just finished The Little Book of Sideways Markets (2010) by Vitaliy N. Katsenelson. Mr. Katsenelson is a value investor, an author and CEO of a small but classy Colorado investment advisor; he offers a singularly engaging personal bio on his well-read Contrarian Edge blog. His two books cover the same ground, but are written for different audiences: professional (Active Value Investing) and lay (The Little Book of Sideways Markets). His concern here is with markets that can go up and down for 10 or 20 years and end up near where they started. In this article, I look at investing in a turbulent market which I believe will occur over the Continue reading →
I appreciate the opportunity to write for Mutual Fund Observer. I am a great fan of MFO, and it is my primary investment tool. I am a small investor, an engineer with a MBA nearing retirement. I spent the majority of the past dozen years working overseas and used my spare time reading about history, economics, forecasting, and investing.
The data used in this article is current as of July 2019. As of August 24th, the S&P 500 has lost 5% bringing the 12 month return down to 1.5%. Meanwhile the Vanguard Total Bond Market (BND) is up 10% over the same period. In this article, I look at risks to the financial markets and economy, how funds with varying allocations to stocks have done over the past 20 years, identify 36 top low risk funds with high risk adjusted returns, and create three hypothetical million dollar portfolios based on the current environment. Continue reading →