Blog Archives

Don’t Let Home-Bias Investing Trip You Up

The total U.S. stock market has gained over 20% during the past year and is doing great. But for U.S. investors that are under-weighted to foreign stocks, it’s not so great. Why? Because foreign stocks have convincingly outperformed U.S. equities, thereby causing a performance deficit. What’s the problem?

The tendency of investors to concentrate and tilt their stock and bond holdings toward their home country is referred to as “home-bias investing.”

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Why Contrarian Investing Still Works

Being a contrarian investor is a lot harder than it sounds. It means doing the opposite of the crowd. It means having the stomach and stamina to buy assets or investments that are unloved, misunderstood, and trading at bargain prices.

Highly respected investors who made their fortunes by being contrarians include David Dreman,

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Improving Bogle’s 50/50 Portfolio

Jack Bogle has made changes inside his personal investment portfolio.

In a news interview last week, the legendary indexer revealed that his 60% allocation to U.S. stocks and 40% to bonds via index funds (Nasdaq:VBINX) has shifted to a more conservative asset split of 50/50 in each group.

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Portfolio Report Card: Analyzing a Self-Managed $1.45 Million Investment Plan

What are the hallmarks of a well-built investment portfolio? Low cost, broad diversification, tax-efficiency, risk compatibility with the owner, and performance that matches or beats an apples-to-apples yardstick.

My latest Portfolio Report Card is for a married couple, C.J. in Orange County, CA. He is 57, she is 58 and they asked me to grade their combined $1.45 million investment portfolio.

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Don’t Get Hit By a Falling BRIC

A credit bubble (China), inflation (Brazil), and the threat of war (Russia) have made BRICs a dangerous place to invest. Is the worst over?

“BRIC” is an acronym for Brazil, Russia, India, and China that was introduced in 2001. Enthusiasm for investing in stocks from BRIC nations rose in the mid-2000s as mega-emerging markets outperformed developed stocks (NYSEARCA:EFA).

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