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Category Archives: Portfolio Diversification


Why 1 Billion IQ Points Know More Than You

“Nobody knows nothing” is a statement made by screenwriter William Goldman about the movie business. He meant that even after making movies for more than 100 years, no one actually knows exactly how to make a successful movie. Sometimes sure things bomb. Sometimes long shots win big. The investment business is like the movie business.  [...]

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ETF Basics: Invest Globally, but Cautiously

Not all foreign stock investments are created equal. A few weeks ago, we wrote about owning stocks in companies based in emerging markets (Brazil, Russia, India, China) and the different types of risks and returns one can expect. The exciting growth in these countries also comes with a fair amount of risk, including governments with [...]

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Bond With Your Bonds

As an investment advisor it seems that we have a daily conversation with an investor who is running for the exit with whatever is getting trashed in the media.  Last April, it was European equities.  This month it has been bonds. The prognosticators have spoken, and apparently the news has finally leaked out to the masses: [...]

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You Might Not Have 'Beat The Market' in 2010

Retirement investors who want investment advice are faced with two basic choices: pay high fees for professional mutual fund managers to beat the market (called “active” investing) or buy low-fee funds that simply own all of the stocks in a given group (“passive” investing). If you have an actively-managed portfolio, it is important to determine [...]

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How To Own Real Estate Without Fixing Toilets

Nearly every retirement portfolio should contain real estate holdings. Sophisticated investors hold diversified real estate portfolios that can include portions of office buildings, apartments, industrial warehouses, retail centers, and shopping malls both in the United States and internationally. Owning real estate has its own set of risks and benefits. A property that is well-located and [...]

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4 Ways Money Buys Happiness

If you have ever felt confused about the relationship between money and happiness, you’re not alone. Even the Beatles were torn over the subject, declaring in one famous song, “You can’t buy me love,” and then lamenting in another, “Your lovin’ don’t pay my bills-give me money. That’s what I want.” Gallup researchers have helped [...]

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One Way To Fight Inflation

In January 1997, the U.S. government began issuing a new type of bond: Treasury Inflation Protected Securities (TIPS). TIPS are a separate asset class that’s distinct from bonds because they behave differently during inflationary times. By owning them, you are further diversifying your portfolio and reducing risk. If you don’t own TIPS, you should. At [...]

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ETF Basics: How to Invest in Commodities

Commodities are one asset class that has recently become acceptable to most financial advisers as part of a globally diversified portfolio. A large number of the most controversial exchange-traded funds invest in commodities. Most commodities ETFs do not perform as advertised. That’s why it’s important to know how we select ETFs for commodities and which [...]

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Portfolio Envy-Why Her Portfolio is Bigger Than His

While Freud’s 1908 theory of penis envy has been wrought with controversy for over a century, financial sciences have clearly demonstrated that when it comes to money management, most men should have a serious case of portfolio envy. As some men like to take pride in bringing home the bacon, this realization could be quite [...]

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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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