As volatility has increased in the past 3 weeks, I want to keep you well informed of my thoughts. Are the past weeks normal, have the fundamentals changed, or is this the canary in the coal mine we’ve been waiting for? These questions are answered in my video. Hi, Mike Brady here with Generosity Wealth Management, a comprehensive, full service wealth management firm, headquartered right here in Boulder, Colorado. I last spoke to you a couple of weeks ago and at that time, I talked about the third quarter. I said it’s been a tough quarter, very volatile and it ... Read More
In my video today, I ask the question “is it time to run for the hills, or jump off the ledge?” because of the recent increased volatility and decline in the markets. Let me give you the short answer: no. The bond correction was an over reaction, and the most recent equity dip is not a precursor to some big decline. At least not in my opinion. For a full discussion of this, listen to my short video where I expand on these ideas. Hi there, it’s Mike! Friends, Mike Brady here with Generosity Wealth Management – a comprehensive ... Read More
Americans’ grasp of concepts such as investment risk and inflation has weakened, lower than 2009, according to research reports. On the flip side, confidence is still high, and many people gave themselves high marks for managing their finances even as they were using payday loans or over-dawing their checking accounts. As my video above discusses, understanding some of the “big issues” can determine the success or failure in reaching your goals. You obviously have higher than average financial knowledge (because you’re reading my newsletter), but still let me know if I can help you or someone you know, in tackling ... Read More
I’ve met with literally thousands of people over my 21 year career. Many people have asked “how can I be rich?”. The question is so difficult to answer. Besides the obvious “win the lotto” and “hope you inherit tons of money”, most of us will increase our probability of reaching our goals if we simply spend less than we make, save religiously, invest wisely, and avoid catastrophic financial events. Your ability to make saving a habit is one of the first steps. Perhaps you’re already a good saver. Whether you’re a great saver or wish you could be better, I ... Read More
Much of the unmanaged stock market index gain for 2012 was in January, April, and June. May was brutal. In my opinion, you must have a well diversified, long term strategy for your portfolio and for reaching your financial goals. Do you have a plan and strategy you’re comfortable with? If the answer is “no” in any form, I encourage you to call me so we can discuss what needs to happen in order for you to emphatically answer “yes!” to that question. Full Article on Winners and Losers for the 2nd quarter at the link below. Click for Full ... Read More
I have no idea what Facebook stock will do over the next 2 to 10 years. I hope it does great. That being said, the above chart is the reason you don’t buy on hype or let your emotions lead your investment mind. Be the smart money. Do your homework. Know why you buy a stock, under what conditions you’ll sell it, and be sure it’s part of a long term diversified strategy. Read More
I’m asked periodically what I think of “market timing” or “active management” versus a straight buy and hold philosophy. My first response is usually to ask for a definition of those terms. While it may be obvious to the person asking the question, if you ask 3 people you’ll get 3 different answers. In this week’s video, I propose some definitions, but also share that while I think active management is preferable over your traditional buy & hold, market timing is great in theory but hard to execute in the real world. Click to watch my video. TRANSCRIPT: Good morning! ... Read More
The first quarter of this year was very forgiving of any errors. We’ve had low volatility, generally positive economic reports, and even Europe has been less in the news than previously. Watch my video for my thoughts about the 1st quarter, and to find out if I’m still optimistic for the 2nd quarter and rest of the year. TRANSCRIPT: Good morning! Mike Brady with Generosity Wealth Management and I am here in Boulder Colorado, giving you my first quarter review and my second quarter preview. Absolutely wonderful first quarter; I’m going to throw some of the numbers up on ... Read More
Are you a “lane changer”? In traffic, he’s the guy who’s constantly changing lanes, expending a lot of energy but doesn’t really get ahead. We all know we’re supposed to “buy low and sell high”, but unfortunately your average investor doesn’t do that. When we look at the flows into and out of equity funds we find that people are pouring tons of money in when the markets are high and withdrawing at market bottoms. Why? By the time people feel comfortable with the direction of the market (investor confidence is increasing), they’re looking at recent past data and many ... Read More
Continuing the theme from my video, investor behavior has a significant influence on your success. A recent study found that cells deep in the brain calculate a sort of moving average of past events, giving the greatest weight to the most recent outcomes. So, even after a long term upward trend, or long term downward trend, a few months in the opposite direction can prompt impulsive investor decisions towards or away from stocks. Avoid the knee-jerk reactions. This is Your Brain on a Hot Streak Read More
The year is almost over and as I prepared for this blog, I thought about a video I did last summer but never shared with you. The summer was so busy and volatile, I wanted to provide you with my current thoughts in such a tough time, so this video (which is one of my favorites) got pushed to the side. The video is about information: more information doesn’t necessarily mean better information. I remember when having more publicly available information was a competitive advantage, but with free internet news sites with up to the second information, that advantage is ... Read More
Even the best can make bad calls. Warren Buffett buying Bank of America? Woops. Bill Gross betting against Treasuries? Yikes. John Corzine? John Paulson? Both very wrong in their market calls. You’ve heard me over past 3 years talk about humility and diversification. My 21 years in the business has taught me that the investment, sector, stock, etc. that I absolutely love is still the one I need to calmly and rationally buy in an amount that I’m willing to be really wrong in and cut my losses quickly if necessary. Even the best can make bad calls. Click for ... Read More
The 3rd Quarter 2011 is over and I have a slightly longer video this week because I want to address the current environment and how things may shape up going forward. A big theme is my advice to assess your overall plan and risk tolerance, and also to ensure you’re looking at both positive and negative points of view on the markets instead of just one view over the other. I send my newsletter and videos on a weekly basis, so if you watch only a few througout the year, at least watch my more comprehensive quarterly videos. Click to ... Read More
I’m a big fan of “behavioral finance” as many of you know. This includes understanding the importance of our human nature to the decisions we make in our lives–including finance. This week’s video I talk about the tendency for us to only listen to data that supports our pre-concieved conclusion. As investors, we have to avoid this! Read More
I’ve had a relatively low position in stocks for clients for quite some time, but I’ve decided to lower it even further. I’m quite concerned about the correlation between Europe and the US, emotion/news driven volatility, and the uncertainty about what the Fed will do. The risk just doesn’t warrant having as high a percentage as I’ve had. On the flip side, profitability, efficiency, and cash balances have all been rising in the firms that comprise the S&P 500. Is the return worth the risk? Click on video to hear more. TRANSCRIPT: Hi there, Mike Brady with Generosity Wealth Management, ... Read More
Statistically speaking, when 2 or more things move together (both zig at the same time instead of some of them zagging) it’s called a correlation of 1.0. Over the past 30 years the correlation of the global markets have continued to increase towards 1. This means that it’s a high probability that as Europe falls, it will impact our US markets. How much is the question, but our fates seem to be intertwined. CLICK FOR FULL ARTICLE Read More
Part 1 was 1.5 weeks ago. This is part 2, updated as of Monday morning. It’s a particularly long video, but filled with my current thoughts * What does the S&P downgrade mean? * What should you have and not have in your portfolio? * Should you move everything to cash? * Is this emotional selling or fundamental? I’m going to have 2 or 3 videos this week since so much is going on. One of the aspects of my job, in my opinion, is to over communicate with you as the adviser/client relationship is a partnership. TRANSCRIPT: Hi there, ... Read More
Debt Ceiling, Greek and European debt issues, bad global recession….. Should you freak out? Time to move the cash to the mattress? I don’t think so. Here are my current thoughts…….. TRANSCRIPT: Hi! Welcome to the Generosity Wealth Management weekly Video/ Newsletter. And this is the last week of July and what is really hot topic in the news right now is the debt ceiling negotiations; you know, should you panic, should you freak out, should you change your portfolio? And I have to tell you that I am actually more optimistic than pessimistic; which is in favor right now. ... Read More
A puzzle that was so hard the first time around is simple in hindsight. This is known as Hindsight Bias. This week I talk about the psychological phenomenon of Hindsight Bias and investors’ over reliance on Performance Numbers. TRANSCRIPT: Hi Clients and Friends, Mike Brady here. This week I want to talk about Hindsight Bias and why many investors put an overemphasis on past performance. I mean if you’ve been an investor for some time, you’ve probably had that experience where you find a mutual fund that’s had a great track record for three, four, five years, or so, you ... Read More
The tsunami that hit Japan last week and has affected their nuclear reactors is causing great concern in the stock markets. The Nikkei dropped 11% a few nights ago. The US markets have dropped 2% this morning (Tuesday as I write this). Now is the time to determine if you’re gambling or investing?. Is this an emotional sell off or a harbinger of things to come? I discuss Emotional Selling in my video this week. TRANSCRIPT: Good Morning Clients and Friends, Mike Brady here. This week I want to talk about emotional selling. The tsunami hit Japan late last week. ... Read More
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The Dow Jones Industrial Average is an unmanaged, price-weighted index of 30 large capitalization stocks with dividends reinvested.
The Standard & Poor’s 500 Index (“S&P 500”) is an unmanaged, market capitalization weighted index of 500 widely held stocks, with dividends reinvested, and is often used as a proxy for the stock market.
The Nasdaq Composite is an unmanaged, market capitalization weighted index of stocks listed on the Nasdaq Stock Exchange, and are reported as price return without reinvestment of dividends.
Indexes are often used as a proxy for the stock market and cannot be invested in directly.