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News and information about preserving your life savings

A Hot Pick for 2011: Don't Pick Stocks That Start With

This would be funny, if it weren’t so sad. Evidence shows that stock-picking investors may be better off choosing what the stock analysts scorn than what they recommend. That’s right, the stock analysts — the folks who are supposed to be the ones in the know — seem to be better at identifying ho-hum than hot returns. I was reminded of this concept when I read Brett Arends’ well-researched Wall Street Journal article, “ Why You Shouldn’t Trust Wall Street’s Top Stocks for 2011 .” While we’re all bombarded by a barrage of daily stock tips, how many of them do...
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7058 Hits

2010 Year in Review

Now that the New Year is officially under way, I find myself reflecting on the events of the prior year. Print media publications and financial websites are filled with reflections and predictions. As far as the predictions are concerned, if we rely on observations from years past, almost all of them will be wrong or meaningless soon enough. Yet, as far as professional reviews go, Dimensional Fund Advisors has provided us with an outstanding 2010 Economy and Markets Review  to help us make sense of the year just ended. It’s the best one I’ve seen out there, and I thought I...
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2979 Hits

Who is Dimensional Fund Advisors (DFA)?

As some of my posts contain information produced by Dimensional Fund Advisors (DFA), I thought it would be appropriate to explain a bit about who they are, and why I reference them with some regularity. DFA was founded in 1981 and is currently headquartered in Austin, Texas. Its governing board includes a who’s who list of respected academics and financial economists such as professors Eugene F. Fama of the University of Chicago and Kenneth R. French of Dartmouth. At its core, DFA is a mutual fund provider. In that respect, it bears similarities to many other fund providers whose names may...
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3302 Hits

Deficits, Debts and Markets

Does increased government spending negatively impact a country’s economy and financial markets? With so many questions surrounding this issue lately, it’s no wonder clients ask us about it quite a bit. This article, adapted from Marlena Lee’s presentation on the Economics of Fiscal Deficits, looks at historical evidence to answer these and other common questions about sovereign debt and the potential impact on investor’s long term wealth. The bottom line conclusions: (1) High deficits might dampen future economic growth, but that’s not a certainty. (2) Deficits don’t necessarily result in poor investment returns. In fact, they may have the opposite effect...
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3696 Hits