“Don’t just do something; Sit there!”
Once again, data from USA TODAY and online portfolio tracker SigFig shows active traders dramatically underperform those with a buy-and-hold approach.
TAG: Investor Behavior
Steer Clear of Bonds?
Everyone knows interest rates have nowhere to go but up. It is only logical to avoid the inevitable “bond crash” by selling now, right? Not so fast.
The Role of Bonds
In our view, the primary role of bonds is to provide safety and capital preservation when they are needed most—during the inevitable periods of stock market distress. Despite legitimate and growing concern over our country’s financial condition, recent examples continue to illustrate the role U.S. Treasuries play as the ballast of a well-diversified portfolio.
The Role of International Stocks
Non-U.S. stocks currently account for more than half the global market. Despite this fact, investors still commit relatively small portions of their portfolios to investments abroad. In this essay we discuss the appeal to investing overseas and address the question of how much exposure is needed to reap the benefits of international diversification.
Evidence of Bad Behavior
Buy low, sell high. At least, that’s the theory. While the U.S. stock market has climbed 15% in 2012, investors have collectively withdrawn $60 billion from stock mutual funds. Just more evidence of undisciplined investor behavior.