Federal Reserve Rate Hike: What Does it Mean?
The events of the past week bring one word to mind: finally. Last Wednesday, the Federal Reserve (Fed) finally raised the target for the federal funds rate by 0.25%. By raising this key overnight borrowing rate, the Fed raised interest rates for the first time in nine years—an event that [...]
Back to School and Snore Your Way to Investment Success
I hope you are enjoying these last days of summer and that you have had the chance to take a great vacation! For me, the past few weeks has brought another "Back to School" season for the family. But this time around, the school year's start is much different! Instead [...]
Should You Worry about China’s Stock Market Volatility?
The volatility of the Chinese stock market has been viewed by U.S. investors with a mixture of concern and fascination. As of August 4, the Shanghai market is still up 16% year to date even after a nearly 30% decline from its June 12 peak. This roller coaster ride has [...]
Can You Count on Dividends as a Reliable Income Source?
Dividends can be an important source of income. However, there are several factors you should take into consideration if you'll be relying on them to help pay the bills, especially if you are no longer earning income. An increasing dividend is generally regarded as a sign of a company's health [...]
Happy Belated Birthday Bull Market!
The financial crisis of 2008 seems like such a long time ago. During the crisis, we saw the collapse of Lehman Brothers, bank bailouts and forced mergers, massive federal stimulus, and extraordinary Federal Reserve (Fed) policy. We experienced near unprecedented stock market volatility when daily stock market moves of 5% [...]
Should You Worry about a Federal Reserve Interest Rate Hike?
After years of record-low interest rates, at some point this year the Federal Reserve is expected to begin raising its target federal funds interest rate (the rate at which banks lend to one another funds they've deposited at the Fed). Because bond prices typically fall when interest rates rise, any [...]
Do Investors Still Need Diversification?
With any investment approach, it is crucial to have a plan, and the bedrock of any investment plan is to have a well-diversified portfolio among various asset classes. The rationale behind diversification is to mitigate risk, as you never know when something could adversely affect one of your investments. If [...]
Investor, Know Thyself: How Your Biases Can Affect Investment Decisions
Traditional economic models are based on a simple premise: people make rational financial decisions that are designed to maximize their economic benefits. In reality, however, most humans don't make decisions based on a sterile analysis of the pros and cons. While most of us do think carefully about financial decisions, [...]
Is the Stock Market Casting a Spell on Investors?
After the financial markets posted another strong performance during the first half of this year, the word “magic” keeps coming to mind! And it’s not just because the word offers an apt description of the pretty wizardly stock market returns lately. My current interest in sorcery also comes from observing [...]
Is the Stock Market Rigged?
Is the stock market rigged in favor of high-speed electronic trading firms? Perhaps, but that shouldn’t matter to most investors. Last week, media reports and a new book by author Michael Lewis have focused on a form of high-frequency stock trading where professional traders use sophisticated computers and complex programming [...]