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In the last post, I mentioned that China’s stock market is in freefall since about the middle of June and how it would be a great case study in investor behavior.
My lack of elaboration caused some confusion around the statement and the chart. So I thought I’d clear one thing up – the MSCI China Index is very different from China’s stock market.
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I update the asset class, sector, and country returns twice a year – at the half way point and year end. The end of June means it’s time for an update. But before I get into the actual results I want to point out a few things to take notice of beyond the numbers.
The charts are a simple visual tool that helps to explain a few simple concepts like how returns change from one year to next, how a diversified portfolio gives up the best returns in order to never get the worst returns, and how so many investors fall victim to chasing the past. Continue Reading…
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I’m posting this a day early because I’m getting a jumpstart on the holiday weekend. Yesterday, I watched a Talks at Goggle video (embedded below) on Tom Gayner. Value investors out there might recognize the name.
Gayner is the CIO of Markel Corp, an insurance company modeled after Berkshire Hathaway. In the video, Gayner talks about his story, how he evolved as a value investor, and what he looks for in a company. He offers up his four points on what he looks for: Continue Reading…
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The hints of a Fed rate hike have been fairly constant since before the year started. The earliest guesses wrongly put the hike in June. Some have said September. The reality is nobody knows. It’s that uncertainty that gets people worrying about how it will impact their portfolio.
The funny part about all this is people have complained about low rates for six years. Now people are worried about getting what they wanted. But at what cost? Continue Reading…
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Between fear of losing and fear of missing out, you cover a big chunk of bad investing decisions.
Nobody likes to miss out on what seems like easy money (it never is easy). And they definitely hate to lose even more. Yet, following both lines of thought leaves you in a vicious cycle where you never get anywhere.
Avoiding or breaking that cycle should be your goal. I believe the best way to do it is through experience, knowledge, and better planning. Continue Reading…
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Every investment has the potential to offer you something – better returns, diversification, less volatility, more security – but most investors overlook the baggage that tags along.
I’m not talking about the stuff you carry on a plane. These are pre-existing problems you don’t find out about until much later in the relationship.
Simply, there’s always a tradeoff that must be weighed with every investment decision.
Most investors focus on the potentially good outcome while overlooking the bad possibilities and problems. The pros are why you invest. The cons, warts and all, that cause mistakes and bad behavior are often overlooked or ignored. Continue Reading…