Optimism isn’t just an attitude. For long-term investors, history gives us compelling reasons to be optimistic. Since 1926, U.S. stocks have produced positive returns in roughly three out of every four calendar years. Over five-year periods, stocks have increased in value 87% of the time, and over fifteen-year periods, they have increased in value 100% […]
A yield curve is a graph that shows the interest rates investors earn on federal bond commitments with different lengths of time until they are repaid, but with identical credit quality. Normally, longer-term bonds pay higher interest rates than short-term bonds because investors take on risk by lending their money for a longer period of […]
Tulip Mania was a speculative bubble that took place in the Dutch Republic during the 1600s. Prices for rare tulip bulbs rose to extraordinary levels before suddenly collapsing. At the peak, some tulip bulbs sold for more than the price of a home. These events are often used as an example of how markets can […]
First, what is margin? Margin is a collateralized loan from your custodian that lets you control more exposure than your cash balance. How to establish a short position Foremost You better know what you are doing. You are betting against an asset that you believe will fall in value. If you are wrong, your losses […]
The classic duck or rabbit illusion seems straightforward. Some people see a duck while others see a rabbit. With a small shift in perspective, the image changes entirely. Investment decisions can work in a similar way. When “Cheap” Isn’t Is a stock attractively priced or is it fundamentally challenged? Is a low earnings multiple an […]
During Thomas Edison’s long effort to perfect the incandescent light bulb, a small accident captured his philosophy of progress. After finally producing a working prototype, Edison handed it to a young assistant to carry upstairs for testing. Near the top of the stairs, the assistant slipped and accidentally shattered the bulb. The assistant was forgiven […]
A Merger and a Need for a New Identity In 1998, Citicorp and The Travelers Group merged, creating a massive financial entity. Citigroup would be a unified brand that needed a new identity to represent both companies. A Logo Created in Seconds Paula Scher was hired to create the new logo. During the first meeting, […]
Today I want to discuss correlation within the context of portfolio construction. If you live in a climate where the weather is unpredictable, you will want a furnace as well as an air conditioner. You will need a wardrobe that takes into consideration the varying weather. The same could be said about portfolio construction. Covariance, […]
Using charitable contributions is generally only valuable from a taxation standpoint if you itemize deductions on your tax return. If you take the standard deduction, you generally cannot deduct charitable contributions. Even still, this is not the main reason to be charitable. You are supporting causes that you feel are important. Love is not dead […]
What are stock buybacks? A stock buyback or a share repurchase decision occurs when a company buys its own stock from the open market. By doing this, the company reduces the number of shares available to the public. This is the opposite of dilution. Why Would Companies Purchase Their Own Stock? To Increase the Stock […]
