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Full-Text Articles in Business
Timing Matters -- Dollar Weighted Returns., Steven D. Dolvin
Timing Matters -- Dollar Weighted Returns., Steven D. Dolvin
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While a mutual fund manager may make good decisions that result in a positive return, if investors time cash flows incorrectly, they will end up with lower (even negative) returns. This illustrates the difference between time weighted and dollar weighted returns. Unfortunately, the average investor succumbs to human nature, buying high and selling low, instead of the opposite. See a good summary article here, WSJ.
Retirement Planning -- Start Early, Steven D. Dolvin
Retirement Planning -- Start Early, Steven D. Dolvin
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Many people are not prepared for retirement. Older workers do not have enough money saved, and younger workers are not starting soon enough. See some survey results here, WSJ. You should also take the quiz to see where you stand.
Pray For A Bear Market?, Steven D. Dolvin
Pray For A Bear Market?, Steven D. Dolvin
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Most investors save for retirement using company sponsored 401(k) plans -- making investments into the account every month. This is a form of dollar cost averaging. For this type of investment, a bear market might be the best situation, as it will enable investors to buy more shares at lower prices. Since we want to "buy low and sell high," this downward volatility might actually help us. This is counter to what many people would think. See a related article here, Wall Street Journal.
History Lesson: Momentum, Steven D. Dolvin
History Lesson: Momentum, Steven D. Dolvin
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We often talk about buying low and selling high, but many individual investors often do the opposite. Particularly in retail accounts and 401(k) plans, investors are often "late to the party," waiting until the market hits a high to reenter. This behavioral bias results in momentum that may drive the market higher, but how long is the key question. Further, investors would be better suited taking a more disciplined periodic investment approach. With the market just hitting a high, this issue is currently at play. (See article here, WSJ.)
Circuit Breakers In Response To Flash Crash, Steven D. Dolvin
Circuit Breakers In Response To Flash Crash, Steven D. Dolvin
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Following the "Flash Crash," the exchanges implemented single stock circuit breakers (in addition to the market-wide constraints that already existed). These new circuit breakers are already under review, with planned changes set to go into effect in April. See article here, Bloomberg.