Year-to-date, stocks are down almost 20%. And bonds, surprisingly, have lost money too—down about 10%. At times like this—when the headlines are almost all negative—the standard advice is to avoid panicking, to stay focused on the long term. I agree with that, and indeed the data are clear: [...]
Up? Or down?
The market today reminds me of Dickens’s famous line: “It was the best of times, it was the worst of times...” It’s the best of times, of course, because the stock market continues to hit new highs. From a low of 2,192 last March, the S&P 500 has now doubled, reaching 4,466 earlier today. Over [...]
In the ongoing battle between those who believe that the stock market is in a bubble and those who do not, you may have heard mention of something called the CAPE Ratio. Among market indicators, this ratio has the strongest track record in predicting future market returns. What does the CAPE say [...]
The tricky thing about investing is that there is no single “right” approach. A little while back, I talked about the “five minds” of the investor—the optimist, the pessimist, the analyst, the economist and the psychologist. But why these five? There are, in fact, many ways to be successful: You [...]
Where to next?
This week I ran across a statistic so surprising it was hard to believe: During the recent market downturn, according to Fidelity Investments, approximately 15% of investors sold all of their stock holdings. And among investors 65 and older, nearly a third sold all their stock market investments. It [...]