Which of the following two warnings would do the better job of preventing investors from paying too much attention to an investment’s recent performance? Past performance does not guarantee future results Future performance may be lower or higher than the performance data quoted The first warning is what’s currently required …
Read More »FA Center: Why inflation makes holding bonds for the long run riskier than owning stocks
How long is the long term in the bond market? Would you believe 57 years? That’s how long you must be prepared to own U.S. government bonds if you want to be assured of not losing to inflation. This depressing statistic comes from the just-released 2021 edition of Credit Suisse’s …
Read More »FA Center: What January’s market decline means for stock returns in 2021
Move over, January: at least two other months have greater predictive power of stock-market returns than you do. January has a reputation as being able to forecast the U.S. market’s direction over the ensuing 11 months of a year. This alleged ability is known as the “January Predictor” and “January …
Read More »Earnings Results: AMD expects gaming, data center to remain strong in 2021 as quarterly revenue tops $3 billion for first time
Advanced Micro Devices Inc. expects strong data-center and gaming sales to keep sales strong into 2021 after the chip maker topped $ 3 billion in quarterly revenue for the first time late Tuesday and its results and outlook both topped Wall Street estimates. AMD AMD, +0.62% reported fourth-quarter net income of …
Read More »FA Center: Why focusing on short-term results can short-circuit your investments and financial advice
Now is when investors need to be especially vigilant to avoid recency bias, which occurs when we give greater weight to events that have happened recently than those that occurred further in the past. Investors are guilty of this, for example, when they get rid of a financial adviser with …
Read More »The Margin: How Trump lawyer Giuliani’s Four Seasons press conference ended up at a garden center on Philadelphia’s outskirts
Trump lawyer Rudy Giuliani speaks to the media at a press conference held in the rear parking lot of a landscaping company in Philadelphia on Saturday. Getty Images Some are suspecting a total goof-up by President Donald Trump’s campaign team after lawyer Rudy Giuliani, the former New York mayor, ended …
Read More »FA Center: This mutual fund may have cracked the ‘Buffett Code’ — Berkshire Hathaway’s secret sauce
For the 55 calendar years from 1965 through 2019, Berkshire Hathaway’s stock rose at an 18.6% annualized pace, versus 11.8% for the S&P 500 SPX, -1.15% . (Both returns reflect reinvested dividends.) Warren Buffett can take credit for this, and he appears to be very much in charge of Berkshire. …
Read More »: Former Bank of England governor Mark Carney joins asset manager that owns New York’s World Financial Center
Carney became the governor of the Bank of Canada in 2008 and is widely credited with successfully steering the country through the financial crisis. Peter Summers/Reuters Mark Carney is taking his first job since leaving the top post at the Bank of England earlier this year, returning to the private …
Read More »FA Center: Why the COVID-19 ‘baby bust’ could impact stock prices for the next 30 years
The stock market will be feeling the impact of COVID-19 for decades to come. That’s because the pandemic is causing the U.S. birth rate to fall. A report from the Brookings Institution, predicts between 300,000 and 500,000 fewer births in 2021, calling it the “Covid Baby Bust.” You have plenty …
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