Portfolio Report Card

The Right Context for Active Management

Actively managed portfolios are not a device of nefarious origin. And neither is it a “dead exercise” as the vox populi has declared. Nevertheless, to be successful at active investing, there are some big time hurdles. Before we discuss these obstacles, let’s first clarify the term “active investor.” An “active investor” is somebody who is …

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3 Diversification Errors

Portfolio diversification is an investment strategy designed to limit risk by spreading money across multiple asset classes and securities. Most financial literature along with your local financial advisor will agree that diversifying your investments is a prudent thing. But while diversification may seem like a straightforward process, it isn’t. And some investors and their advisors …

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What to Do About Fading Stock Market Momentum

Wall Street has been so busy with one all-time high after another, many have already long-forgotten that it’s  been over one-year since the stock market corrected by 10% or more. But as the great poets say, “we don’t remember the days, we only remember the moments.” (Audio) Are ETFs turning people into day traders?  At this …

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A $1.3 Million Portfolio Report Card for JPG in Maryland

What are the hallmarks of a well-built and financially sound investment portfolio? For some, it’s simply owning the top performing stocks or mutual funds (Nasdaq:AMCPX). For others, it’s owning the funds or ETFs (NYSEARCA:SCHB) with the lowest cost. And yet for many others, their definition of a well-built investment portfolio is to own whatever securities popular …

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Is Your Portfolio’s Performance Satisfactory?

What’s your investment portfolio’s performance? Do you know? Just 57% of U.S. adults are “financially literate,” according to a study from Standard & Poor’s titled the “2015 Global Financial Literacy Survey.” Another study by a large insurance company found that people are more frightened by planning their finances than dying.  What’s wrong? Part of the problem …

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Got Real Estate?

Look at your investment portfolio. Do you have exposure to real estate? Is your exposure broad or is it limited to just one company? Some individual investors feel they don’t need to own real estate inside because they already own a home or condominium. Some may even a vacation home or rental properties located close …

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How Should Your Non-Core Portfolio Look?

I’ve written extensively about the role of an investor’s non-core portfolio. It’s one of the three cornerstones of a well-built portfolio (see figure below) and it always plays a complementary role to the much larger core portfolio and a person’s margin of safety container. If used properly, the non-core portfolio can greatly enhance an investor’s total …

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Fund Shareholders with SunEdison Get Zapped by Bankruptcy Filing

SunEdison now joins the endless parade of defunct stock market ex-darlings like Enron, eToys, IndyMac, and Washington Mutual. Yes, the circumstances are different, but the results are the same: bankruptcy. Once the largest renewable energy developer in the U.S., the Missouri-based company listed $16.1 billion in debt in its Chapter 11 bankruptcy filing on April 21. SunEdison might …

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Lagging Small Cap Warning Sign For Stock Market?

The Performance of Active Managers Keeps Getting Worse

Years ago John Bogle once quipped, “If the data do not prove that indexing wins, well, the data are wrong. ” Here’s the latest: There’s no need to second guess Bogle on this particular matter because a) the data proves indexing wins, and b) the data is completely right. The table below shows the 1, 3, …

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Retirement Plan

Is “Saving More Money” Always the Cure?

Wall Street’s remedy for fixing whatever problems that afflict your investment portfolio is simple: “Save more money.” And if you happen to be among the godforsaken group that always manages to have unsatisfactory investment results, regardless of whether the pesky stock market is up or down, Wall Street’s solution is invariably the same: You need to “save …

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A $1.58 Million Portfolio with No Captain

Has your financial advisor contacted you lately? Although global stock markets (NYSEARCA:VT) have recovered from their earlier in the year losses, it could’ve revealed flaws with your investment portfolio’s design. Often, flaws that are camouflaged by rising markets are exposed and exploited in rocky markets. (Audio) Why Robo “Advisors” are Hazardous to Your Wealth Ultimately, advisors should take responsibility for …

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3 Reasons Why Robo Advisors are Hazardous to Your Wealth

“Robo advisors will manage over $5 trillion in 10-years.” Have you seen headlines like this? According to the reports, robo advisors are so wonderful, they’re going to overtake the world and make it a better place to invest. Imagine, if you can, flowers and cute Bambis everywhere! In reality, robo advisors are not really “advisors” but rather online …

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Do You Need to Buy at Market Bottoms to Get Profitable Results?

Legendary speculator Bernard Baruch once quipped: “Don’t try to buy at the bottom and sell at the top. It can’t be done except by liars.” Baruch was on to something. And since reams have been written and said about tops and bottoms in both individual securities along with broader markets (NYSEARCA:VTI), we can’t help but …

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(Podcast) Your 2016 Investing Philosophy in Just Three Words

The beginning of a new year is always an important moment for personal reflection. And whatever it is that we want from our lives – whether it’s to become a better spouse, begin a new exercise routine, or just become better people – we must recognize that change is imperative if we’re going to reach our goals. …

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How Would Your Portfolio Do in a 50% Market Decline?

Prudent investing in a reckless world has become a long-forgotten idea. And the 6-year run-up in U.S. stock prices (NYSEARCA:VOO) has certainly been a contributing factor. After love, risk might be the most misunderstood and misinterpreted word in the English language. Today, people’s perverted sense of risk management is making sure they don’t miss the …

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PRC Calculation

How Bad Investments Sometimes Turn Out Good

Do good performing investments always start out good? The short answer is not necessarily. As proof, we showed ETFguide’s readers a real life example in the June 2015 issue of the ETF Profit Strategy Newsletter. In that issue, we shared an incredible story about a 72-year old investor who converted a $95,000 investment made in two …

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4 Signs Your Portfolio Isn’t Ready for a Bear Market

In case you didn’t get the memo, global stocks are now in correction mode. And the velocity of the rout has been shocking to seasoned financial pros not to mention the investing masses. For perspective, the three largest U.S. stock benchmarks – the Dow Industrials (NYSEARCA:DIA), Nasdaq-100 (Nasdaq:QQQ), and S&P 500 (NYSEARCA:VOO) are up between …

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Portfolio Exam: A Hyper-Aggressive $1.29 Million Portfolio with Flaws

It’s commonly and incorrectly presumed that people with large investment portfolios are smart investors. But as counterintuitive as it may sound, this false presumption is simply not true. How do I know? Because I’ve analyzed and graded many multi-million dollar investment portfolios ($27 million is the largest one I’ve graded so far this year) using …

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Headache

(Podcast) Deconstructing the “Double Whammy” Effect on Gold Portfolios

How many people sold their stocks at the 2009 bottom, went to cash and then bought gold at its 2011 peak? In my latest Index Investing Show podcast episode, I explain how “double whammy” effect has damaged certain investment portfolios so severely, the losses could be catastrophic. The solution for investors sitting on big losses from precious metals (NYSEARCA:GLTR) is …

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