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Thought For The Week

A Bitter Rivalry

SYNOPSIS • Yale University’s endowment returns have crushed the competition over the last 25 years. • Alternative investments are those that are not considered to be traditional investments such as stocks, bonds, and cash. • Yale can attribute its stellar performance to its large allocation to alternative investments. (432) – A Bitter Rivalry

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Protecting Against Pilot Error

SYNOPSIS • A survey conducted back in 2015 indicated that 37% fear the stock market and 73% equate buying equities to gambling. • Given the events that have transpired in equity markets since the late 1990s, it is understandable to hear that investors feel that the stock market is rigged. • Hiring a professional and…

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Why Was The Market Up/Down Today?

SYNOPSIS • Market pundits are obsessed with understanding the short-term movements in equity markets. • According to those who follow the daily market moves closely, raising cash to pay taxes was the reason the market fell last Friday. • The daily moves in equities are often a mystery, and the explanations conjured by those who…

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Should Investors Sell All Their Bonds?

SYNOPSIS Concerns over rising interest rates have led to more than one market pundit calling for a “bloodbath” in bonds over the coming years. Bloodbaths do not happen all that often, and even so, the term is a relative one. Investors must always remember why bonds are included in a diversified asset allocation. (427) –…

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The Amazing Power of Dividend Growth

SYNOPSIS • Those who own stocks that pay dividends have voiced concern over the volatility experienced over the last few months. • The real benefit to owning dividend-paying stocks takes years to materialize. • The most boring companies are often the most profitable investments. (426) – The Amazing Power of Dividend Growth

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Why Are Bank CD Rates Still So Low?

SYNOPSIS • The Federal Reserve Bank (Fed) raised their interest rate target this week for the third time since December 2015. • Investors have asked why some rates rise in lockstep with the Fed while others have remained relatively unchanged. • The reality is that returns on cash investments will likely remain at these levels…

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This Love Is A One-Way Street

SYNOPSIS • Diversification is the “Golden Rule” of investing, and investors must remain diversified across asset classes, geographies, sectors, and styles. • Investors often over-allocate a portfolio to a single stock because they either cannot sell or choose not to sell, which creates a tremendous amount of risk. • Concentrated holdings should be avoided at…

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Will We See A Recession This Year?

SYNOPSIS • It’s been close to nine years since our economy recovered from the worst economic downturn since the Great Depression. • Investors are becoming concerned that rising interest rates will lead our economy back into another recession. • The economy will most certainly experience a recession in the future, but the real question is…

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Don’t Get MADD

SYNOPSIS • Greece is back in the news, but it seems as if nobody cares this time around. • There is an epidemic that has plagued Wall Street for centuries, and investors must do everything within their power to avoid infection. • Fortunately, investors can protect themselves with just a little bit of self-control. (421)…

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Should Investors Fear Margin Debt?

SYNOPSIS • The margin debt story is viewed by some as a predictive indicator for a future equity market crash. • Margin debt can exacerbate a sell-off, but there is no statistical evidence that margin debt levels can predict an equity market decline. • Although the use of margin debt is never recommended for individual…

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