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Learn From the Cramer Kerfuffle

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I am no fan of Jim Cramer. While I fully understand his persona is a carefully crafted schtick designed to entertain, his Mad Money program harms Main Street investors. His stock-picking recommendations are no more likely to be accurate than the flip of a coin. The myth that Cramer has some special insight into the…

Read This Before You Buy a Mutual Fund

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According to the 2014 Investment Company Fact Book, the mutual fund industry in the United States manages an astounding $15 trillion in assets. That represents a whole lot of investors who must be disappointed with the performance of their actively managed mutual funds. Approximately 85 percent of active large-cap stock funds underperformed their benchmark indexes…

View Tony Robbins’ Investing Advice with Skepticism

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America has discovered a new financial guru. Tony Robbins’ new book on investing, MONEY Master the Game: 7 Simple Steps to Financial Freedom, has shot to the top of Amazon’s bestseller list. Mr. Robbins, who has been nicknamed the “mahatma of motivation,” excels at self-promotion. The publication of his book has generated immense publicity, including…

The Most Important Symbol for Investors Is ‘DOL’

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Many investors are glued the financial news, tracking the latest reports about interest rates, earnings reports and stock movements. They believe this kind of intense focus will help them maximize returns. They couldn’t be more wrong. Instead of spending time looking up a stock symbol to find out its latest price, investors would be better…

It’s Time to Board the Index Express

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The news keeps getting worse for active management. Here’s a summary: Poor year-to-date performance In an article on MarketWatch.com, Mitch Tuchman references data from Bank of America indicating only 17.7 percent of active managers have beaten a large-cap index benchmark year to date. That is a significant decline from last year, when 40.5 percent beat…

Investing Advice: The Good, Bad and Terrible

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There is a huge variation in the quality of advice that investors are exposed to every day. If you can’t differentiate between good and bad information, it can cost you dearly. It may even mean the difference between retiring with dignity and running out of money in your golden years. Terrible advice It’s sad that…

British Documentary Skewers Active Management

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A new multi-part British documentary, How to Win the Loser’s Game, takes a hard look at active management. Although done with typical understatement, the results are not pretty. The complete documentary will not be available until Nov. 5. But you can view the first three parts, produced by Sensible Investing, here. It should be required…

The Real Secret of Successful Investors

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Historical market data are often misused by pundits who believe they can predict the future by looking at the past. Much of what counts these days as “financial news” is simply a parade of self-styled “pros” peering into their crystal balls and telling the rest of us how to time the market, pick outperforming stocks…

Learn From the Fall of Active Management

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Proponents of evidence-based investing, myself included, doubted whether this day would ever come. Investors are now actually paying attention to the overwhelming data supporting evidence-based investing and are fleeing active management. Some of the recent developments reinforcing this growing trend are: Index funds are mainstream John Rekenthaler is the vice president of research for Morningstar….

How NOT to Prepare for the Market Correction

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Almost everyone believes a stock market correction is inevitable. The financial media whip up a daily frenzy of anxiety by offering conflicting views from “investment pros” on when this correction will occur. Here are some tips for dealing with the “market correction” issue. Don’t try to time the correction There is no academic evidence indicating…

The Algorithm Scam

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An algorithm is defined as a set of detailed instructions that result in a predictable end-state from a known beginning. The discovery of an algorithm that would consistently generate outsized returns would be the holy grail of investing. The individual who came up with such an algorithm and published the methodology in a peer-reviewed journal…

401(k) Madness

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All across America, a familiar ritual is repeated at least quarterly. Sponsors of 401(k) plans meet with their brokers, insurance companies or other advisers. The purpose of the meeting is to decide which funds to keep as investment options and which ones to eliminate. Everyone has a familiar role. The plan adviser comes prepared with…

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