Top 5 of the Week of April 17
A Wealth of Common Sense’s Ben Carlson kicks off our Top 5 this week with a look at what other areas of life would be like if they acted the same as Wall Street. J.C. Parets, Founder & President of Allstarcharts Holdings, extinguishes the belief that we’re in an 8-year bull market. And Anthony Isola urges us to not be elitist investors for his A Teachable Moment blog.
Tim Brennan, the founder of Ariadne Wealth Advisors, writes of how optimism is a driving factor of investing success. And Barry Ritholtz, Chairman & CIO of Ritholtz Wealth Management, discusses the truth about the life and/or death of active stock management…
Only on Wall Street
- One hit wonders: We continue to remind you of the success we released years ago even though we’ve not created anything remarkable since
- Work performance measures: Innovation must happen consistently, if you’re not achieving glory 24/7, you must be slacking
- Product selling: We are going to make this recommendation to you, but if that fails, we’ll suggest you should have done something entirely different
Share your comparisons of Wall Street with other areas of life in the comments section below
Using Numbers to Fool You
- Many speculations are being submitted that this year marks the 8-year bull market anniversary of the S&P500
- This is based on the argument that 2011 was the first time the S&P500 did not fall to 20% on a closing basis
- What these people don’t admit is that this number is entirely subjective, intended only to reinforce their self-serving reality—without letting facts get in the way of this
Being a Snob Will Cost You Money
- With great wealth comes the elitist expectation that you should be paying top dollar for investment products
- Get over the stigma that you can’t invest in services or products that are accessible to everyone; just like the incredibly rich Warren Buffett
- His recent bet leveraged that he would make more with the low-cost S&P500 index fund than investors sinking money into hedge funds
- An outcome which returned 7.2% gains from the S&P500 to the hedge funds mere 2.2%
Pessimists Lose Out
- Lack of confidence in your investing abilities can be detrimental to your success—be optimistic about your skills and future
- And not just in yourself, be positive about the future of the financial markets and global economy; the stock market can be rewarding, and the evolving economy is strengthening
- Confidence in your investing abilities is not about beating the market but understanding your behavior (and overcoming it) and knowing the limitations of your investing knowledge (and accepting them)
Active Stock Management: “Dying, Dead or Making a Comeback”?
- Financial media is taking a variety of stances on the life, and death, of active stock management—depending on what you read
- There is a lot of research to show that trying to beat the market—or a specific benchmark—is hard to do consistently
- Behavior and certain factors (size, value, profitability, etc.) have a lot to do with active funds success too—making it less ‘active management’ and more closet factor investing
Top 5 of the Week is a summarized collection of financial investment articles that we like and think you might like too. Having written thousands of pages of equity strategy and company research between us, we understand the allure of the ever-changing world of finance. Investing is an art form—and like everything, something you can work on and improve at. There are some excellent writers out there on the finance web, some offer a running commentary on today’s market, some are doing research, some have tips on how to Become a Better Investor, and some just lift the cloud of fog behind a lot of financial jargon. Each week we will keep you up to date with the top 5 articles worthy of your attention.
Anything you would like to discuss about this week’s top 5? Do you have another favorite that isn’t mentioned here? Feel free to add it below. Let’s start a discussion in the comments section!
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DISCLAIMER: This content is for information purposes only. It is not intended to be investment advice. Readers should not consider statements made by the author(s) as formal recommendations and should consult their financial advisor before making any investment decisions. While the information provided is believed to be accurate, it may include errors or inaccuracies. The author(s) cannot be held liable for any actions taken as a result of reading this article. The Become a Better Investor Team doesn’t necessarily endorse any stocks or shares mentioned in the articles or the author of such articles linked to and summarized in Top 5 of the Week and cannot guarantee the accuracy of its information.