Investors (like all humans) possess built-in mental “handicaps” that poison their decision-making. The sunk cost fallacy, hindsight bias, and anchoring are just a few of the most problematic. Yet perhaps even more troublesome than these errors is the phenomenon known as “mental accounting.” Mental accounting refers to the tendency of humans to develop and make […]
How Your Personality Type Dictates Your Investing Style
What if I told you a crucial key to your investing success is something you never expected? It’s not a breakthrough stock-picking formula. It’s not a special brokerage account. It’s not a cutting-edge tax shelter. It’s your personality type. Now, bear with me: I’m not talking about astrology, newspaper horoscopes, or those scammy online tests. Those […]
Treasury Bills: A Smart Bet for Conservative Investors
Many of us tense up when we hear the word “investing.” We remember movies like Wall Street and Boiler Room where fast-talking traders lost millions on stocks they swore would pay off. Unsurprisingly, some of us decide that investing is just too risky for the average person to get involved in. But this is a […]
Before You Start Investing in Oil, Read This Article First!
Many aspiring college investors have thought about dabbling in oil. It’s a commodity in demand, traded every day on exchanges worldwide, and offers the potential for significant returns. But oil is not for everyone. Before rushing to buy a futures contract or calling your broker about spot prices, consult the following beginner’s guide to investing […]
A Total Beginner’s Guide to Real Alternative Investments
Young investors often assume that investing is strictly limited to the stock market. Yet, while this is where most investing happens, there is a whole galaxy of investment vehicles beyond the more typical stocks and bonds that everyone talks about. Known as “alternative investments,” these opportunities represent a completely different approach to investing and will be […]
Protect Your Portfolio from Hyperinflation and Depression
Not many investors pay much attention to deflation or hyperinflation — most believe they are black swan events. Like a junk food eater who ignores diabetes because he feels okay right now, we tend to think of devastating, macro-level financial catastrophes in an abstract “out-of-sight-out-of-mind” way . . . until disaster hits our doorstep with total […]
6 “Caveman Instincts” That Threaten Your Portfolio
In movies, investors are often seen analyzing charts of numbers or reading The Wall Street Journal. But while data plays a key role, investing often comes down to what happens in our heads. The truth is, human beings are not naturally “wired” for investing. We evolved in caves and jungles – and nothing in our […]
How to Start a Successful Investment Club in College
Let’s face it: investing can be a pretty lonely journey. Poring over the Wall Street Journal, reading prospectuses, monitoring your brokerage account . . . these aren’t the kind of activities your college buddies are eager to come over and do with you. But what if they could be? It’s not impossible. By forming an […]
Could a Monkey Beat Your Portfolio if You’re Day Trading?
I’ll never forget the first time I met a day trader face-to-face. He was dating a friend from college and I was a guest at their apartment-warming party. Amidst all the celebrating, I noticed him sitting alone at his living room desk, scanning a complicated-looking screen of stock data on TD Ameritrade. I was curious. […]