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Monthly Archives: August 2010


The Calculus of Trust

The bestselling book “Freakonomics” chronicles the search for the hidden incentives behind all sorts of behavior.  It characterizes the field of economics as the study of incentives – how people get what they want, or need, especially when other people want or need the same thing.  “Freakonomics” gives entertaining examples of how odd results can [...]

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5 Easy Ways To Learn About Investing

“An investment in knowledge pays the best interest.” – Benjamin Franklin During Soviet era communism, citizen behavior was managed through a monopoly on information. It was the duty of the KGB to know all they could about information flow and to tightly control it. When Gorbachev became head of the Soviet Communist party, he recognized [...]

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Check out what Jennifer Schultz of the New York Times wrote today in the Bucks Money Blog referencing MarketRiders’ recent cigarette analogy to mutual fund managers.  Seems to have hit a nerve. Make sure to also read a comment posted by Morningstar as they too weighed in on the matter! How Mutual Fund Managers Are [...]

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Did Morningstar 'Fess Up Or Stumble?

We love to talk about how our method of investing is as exciting as watching paint dry.  Sometimes, however, there is a little drama in our corner of the investment industry. Russel Kinnel is Director of Mutual Fund Research for Morningstar, Inc.  He released a study this week proving that mutual fund expenses are better [...]

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Where Portfolio Returns Really Come From

Here is a shocking fact: Asset allocation, the idea of spreading one’s money into different buckets or asset classes, accounts for 90% of a portfolio’s return over time. This leaves a paltry 10% of performance tied to security selection and market timing. Think of how radical this fact actually is. When you turn on CNBC or [...]

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How Money Doubles — Understanding The Law of Compound Returns

The latest biography on the world’s most famous investor is titled “The Snowball – Warren Buffett and the Business of Life.”  The term “snowball” is a metaphor for a core investment concept:  the Law of Compound Returns.  Understanding it is critical to your success as an investor and should be at the center of all [...]

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Is Obama's New "Big Brother" Big Enough? — Protecting Your Retirement Dollars

Whether a reference to George Orwell’s authoritarian character from Nineteen Eighty-Four, or a more affectionate reference to an older, more experienced sibling who is looking out for your interests, some form of the Big Brother spirit is at work in the current financial reform laws. In a passionate attempt to protect the individual investor from [...]

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The Yo-Yo Market — Will Your Retirement Plans Meet Your Needs?

Summer is a lazy time of the year, and the market was certainly relaxed until mid-July. The major indices dropped by over 2% as bad news spooked investors. The talking heads in the mainstream media continued blabbing about a double dip recession. Everyone seems to have a macro-economic forecast. A little perspective from Wikipedia shows [...]

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How Did Your Portfolio Perform?– Understanding Risk and Diversification

In competitive pursuits, there are established and transparent measurement systems to determine not just performance but how performance is achieved. In professional sports, a variety of statistics are used to compare individual and team performance. Everyone from team managers to owners to bookies use these common statistics. And because the statistics don’t like, there is [...]

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