3 Lessons from a Stock Market ‘Freak Out’

Just about two months ago, on Oct. 15, the headlines read “Market Freak Out” as the Dow Jones Industrial Average “plunged.” Headlines warned “Why the selling is just getting started.” Fear had returned to the market. My editor asked me to chime in and I posted “Why the Stock Market Plunge Is Not World’s End.” As it happened, not only did the world survive, the stock market quickly recovered. Now is the perfect time to review three investment lessons that …

Are You an Irrational Investor? Here’s How to Tell

Too many of us are irrational investors. Acceptance of this fact and understanding the roots of our irrationality are the keys to better investing. First, the facts. Many studies show that a lot of investor money moves in and out of stock funds at the wrong time, often buying high and selling low. For example, at the height of the 2007 stock market bubble, investors were pouring money into stock mutual funds. After the 2008 plunge, however, those same investors took their …

The Danger of Acting on Stock Market Headlines

Over the past five years, U.S. stocks have tripled in value. For example, the Wilshire 5000 total return index increased from 27.50 to 82.62. Yet paranoia about the market has caused many investors to miss out. The chart below shows the return an investor would have received just by owning a total U.S. stock index fund and reinvesting the dividends. A total U.S. stock index fund essentially owns every publicly held company based in the U.S. Though the chart tracks …

In Banking, Americans Lean Local

I won’t tell you the name of my bank, but I will tell you this: it’s the oldest in the state; it didn’t use account numbers until the Federal Reserve forced it to; it has 25 branches, all within easy driving distance of one another; and every employee at the branch I use – from manager to teller – knows me by name. Not only that, the tellers all have baskets of lollipops and bags of dog biscuits at the …

The Money Secrets We Keep

Although it’s probably safe to assume that financial infidelity wasn’t a culprit in the Shriver/Schwarzenegger split, irreconcilable money differences do play a role in many couples’ break-ups. According to a recent study, the number who ‘fess up to keeping their other halves in the dark about certain spending decisions is quite high – 80%, in fact. Keeping spending secrets from your spouse, partner or significant other doesn’t have to lead down the road to splitsville if you’re willing to do …