To Tilt or Not to Tilt

I tilt. Do you tilt? It’s OK to tilt. Many people tilt. I’m not talking about posture or politics – I’m talking about portfolio design. A portfolio “tilt” is industry slang for an investment strategy that overweighs a particular investment style. An example would be tilting to small-cap stocks or value stocks that have historically [...]

93 Ways to Underperform the Market

Technical analysis reminds me of searching for gold at the end of a rainbow. Children of all ages are mesmerized by the story, yet no one to date has found a pot of gold. It’s not because gold isn’t there – it most certainly exists in the mind of every child. The problem is the rainbow; it’s circular, there is no end to it.

Philosophy Differs From Strategy

Want to be a successful investor? Have a sound investment philosophy before trying to create an investment strategy. Your core beliefs about investing should drive strategy and also keep you disciplined in difficult markets.

The Problem with Market Timing

Successful market timing requires two correct decisions: when to get out and when to back get in. Guessing right once is a 50/50 proposition. Guessing right twice drops the odds to only 25 percent. One wrong guess and you shoot yourself in one foot; two wrong guesses and you shoot yourself in both feet. This is what makes market timing so difficult.

Technical Analysis Drags Down Performance

Trying to predict price trends by studying charts is a popular investment technique. In fact, technical analysis is probably the most common form of securities selection because anyone can do it without much training. Predicting that prices will rise because they have been rising is an easy decision. Avoiding securities that have trended down is another easy decision.