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Contrary to Bubble Belief

Top 5 of the Week of May 8

Our Top 5 this week kicks off with Joshua Brown, financial advisor at Ritholtz Wealth Management, who offers an alternative argument to David Einhorn’s (founder of Greenlight Capital) current market perspective. Forbes Finance Council task us, as investors, to get involved with impact investing. And Ryan Kirlin, writing for Alpha Architect, shines a light on ETF development.

Ben Carlson of A Wealth of Common Sense argues that this “winner takes all” market is nothing new. And Tadas Viskanta, author of Abnormal Returns proposes that we should keep ETFs weird…


Contrary to Bubble Belief

 

  • Recently, Einhorn has proposed the argument that investors are in danger of repeating the 2000 dot-com bubble by investing in profitless companies
  • Bubbles tend to come about though from an overenthusiastic surge behind stocks in a single sector before the popularity of the trend takes a sudden about-turn
  • That being said, it is difficult to find any comparative enthusiasm or sentiment in today’s bull market situation, as “pretty much everyone is miserable”

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Be an Agent of Social Change

 

  • Impact investing is about taking responsibility for the health of our planet—and everyone can get involved
  • These type of investments can help us address problems by filling the gaps that government grants can’t cover with private capital; helping tackle issues such as climate change, severe poverty, and poor access to healthcare and education
  • As investors and human beings, it is our moral obligation if we can to get involved with the challenges our planet faces and be agents of social change

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A Spotlight on ETFs

 

  • Though the ETF industry is over 20 years old, it has only been in the last five years that they have really started to capture the minds of those in the investment world
  • As ETFs have risen in popularity compared to mutual funds, financial advisors are taking the driving seat in portfolio decisions once more
  • But the right tools and education are required to provide holistic advice and help financial advisors address the next wave of ETF services

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Who Will Be the Next ‘Amazon’?

 

  • With fewer companies in a shrinking index pool, it is becoming harder to forecast who the next big “winner” will be
  • This is not a new concept though, the current winners have been defined by their rising popularity due to the disruptive nature of their businesses
  • As such, the future will similarly be carved out by an entirely new group of future winners cresting the top of the market and economy by causing a brand new disruption

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Stay Far From the Norm

 

  • When ETFs first launched in 1993 they were a revolutionary idea that came about by chance following the 1987 stock market crash
  • Since their inception ETFs have mostly had a positive effect, yet they are also criticized for the behavior they cause in investors, their construction for a market trend, and returns that don’t match expectations
  • While not perfect, ETFs are great for testing new strategies and ideas out if kept appropriately “weird” and well-diversified—it’s worth staying enthusiastic about them

How weird are your EFTs? Share your experience in the section below

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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.