“Success is nothing more than a few simple disciplines, practiced every day.” – Jim Rohn Investing and life are more like poker than chess. I recently listened to an interview with Annie Duke. Ms. Duke’s book, Thinking in Bets along with the interview really resonate with me because her thinking is quite similar to mine. In this quick video, I detail the parallels of investing and poker and why it is critical to keep a “poker face,” keeping your emotional composure during bad….and even good investment periods! About Thinking in Bets: Making Smarter Decisions When You Don’t Have All the ... Read More
I remember the 1998 Russian crisis well. It was near the end of the summer, and threatened to put a real damper on an otherwise excellent stock market year. The “Moscow meltdown” bled over the S&P 500, which plunged 20%. There are reasons 1998 and today are different Tough sanction in place have somewhat isolated Western investors Russia has a war chest of $416 billion in currency reserves today, versus very little in 1998 Russia’s currency is free floating, and not pegged to the US Dollar like in 1998. External shocks can be absorbed by the currency markets. There are ... Read More
The 3rd Quarter was schizophrenic, with most of the unmanaged US and international stock indexes negative, bonds (in general) slightly positive, and with tons of volatility across the board. Particularly in the past few weeks, every day there seems to be triple digit swings in the Dow, and lots of negative news (ISIS, Ebola, etc.). Now is the time when we have to remember the big picture and what we as investors are striving towards. It is the time when emotions can be high, but we need to keep a steady hand and focus. Now is when we reaffirm what ... Read More
Tensions with Russia, slowing global growth and falling consumer confidence mean the region’s biggest economy struggled to grow in the past 3 months, and may turn out to have shrunk for a 2nd quarter running. Across the Eurozone as a whole, recently released data showed that economic sentiment dipped in September for a 4th month in a row. Questions abound about whether this could lead into a vicious circle of falling prices and stagnation. I’ll continue to watch this closely and make some macro recommendations for my clients as this continues to unfold. Risk of Third German Recession Pressures Europe ... Read More
The 2nd quarter distinguished itself by significantly increased volatility and ultimately seeing the unmanaged stock market indexes down. Those same market indexes are still up for the year, and it’s my belief they will end the year positive, but with continued volatility. November is the big election here in the United States, and regardless for whom you feel is better and hope will win, the market likes a reduction in uncertainty. At that point, at least some semblance of planning can be done for a few years by the private sector as it analyzes the tax and regulatory environment it ... 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
Sorry in advance for a longer than usual video this month (7.5 minutes), but I have some charts and graphs in there to provide some context for the slow ride down in the un-managed stock market indexes that we saw for May. The question we always have to ask ourselves is “what is this telling us?” and “what does this mean for the future?”. Click to watch my video. TRANSCRIPT: Good morning, Mike Brady with Generosity Wealth Management speaking to you from Boulder, Colorado. And today I want to talk about what’s been going on in the markets; what’s ... 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
John Mauldin is one of my favorite newsletter writers. This week’s newsletter speaks exactly to what my video above addresses–the elephant in the investment room is Europe. I highly encourage you to set aside 10 minutes to read this weekend’s newsletter. It goes into greater depth than I can in the 3 to 4 minutes for my video. Europe is the concern as we enter the dull summer months. Waving the White Flag 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
If you’ve been following my newsletters over the years, you know I believe in diversification and that one of the key ingredients to reaching your goals is to avoid catastrophic financial events. It’s important to note, as the table above illustrates, that not every investment has to make money. Limiting the size and number of the losses is important, and if avoiding any kind of loss at any time is your strategy, then you’ll always be on the sidelines. Risk management is key, and with that it is understanding some investments will do different things at different times, and not ... 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
One of my goals in my newsletter is to bring to your awareness things that I find interesting or alarming. The article below is in the “alarming” category. Japan borows more than it raises in taxes, and its debt amounts to two years’ worth of Japan’s economic output. Japan has the highest debt-to-GDP ratio in the world. Half of the country’s tax income is directed to simply servicing it’s debt. In addition to Europe and China (which I’ve written about in the past), Japan is one of the next huge players we’ll be unraveling in the future. I have great ... 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
Goodbye 2011 and hello 2012! What happened and what’s my outlook for 2012? Optimistic or pessimistic? Watch my video to find out. TRANSCRIPT: Hi there, Mike Brady with Generosity Wealth Management, and today I want to talk to you about a little bit of a review on 2011, but spend most of my time talking about the current situation right now. And you know, maybe do a little bit of a, …, thinking about 2012 and what the future may hold. 2011 was a real volatile year. I mean frankly, when we look back at year upon year we ... 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
Europe has been, and will continue to be, the news event going forward. The effect it has upon the US is irritatingly large, whether we like it or not. As I’ve stated in previous newsletters, the European Monetary Union (Euro) will have to change drastically for Europe to weather their problems. There will also be some drastic, fundamental ways the relationship between state and citizens will change. The question is: what does this mean for your investments? 1. I continue to caution against all things Europe 2. Constantly evaluate the allocation of your investments to ensure they’re meeting your risk ... Read More
By far the easiest and best chart I’ve seen to explain the European problem was published last weekend in the New York Times. If you’ve been wondering if you’re the only person confused by what all the hub bub is about, this is your opportunity to get caught up. Click for an outstanding chart on the European problem 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.