Before we get back to specific thinking errors, let’s start with some basics: First, should we own equity or debt? In other words, should we be investors or lenders? It depends on if you want to build real wealth. I will assume you do. The only way to grow wealth in real dollars is to own equity. All or almost …
Last time we talked about the under-performance investors have compared to the market as measured by the S&P 500 index. Obviously, the index is doing something that investors aren’t doing: Staying put!! Now, staying put sounds easy…until you try it. The market will take a large downturn every 4-5 years. During those times many people will be fearful and may …
By Craig Verdi, CFP® “For I have the desire to do what is good, but I cannot carry it out”– Apostle Paul, Romans 7:18 Not carrying out what we want to do. Obviously not a new problem. To be a good investor we must execute. Sometimes, many times, we must do what is right, and not what we feel like …
Contrary to popular belief, the major part of an investor’s return is not determined by asset allocation: i.e., what “basket” of stocks you are in. Nor is it determined by the overall performance of the stock markets. The main predictor of return is the behavior of investors themselves. “We don’t see people with investment problems, we see investments with people …
By Craig Verdi, CFP® There is a lot of news and information out there on how to choose a financial advisor. Typically, the general public is told to ask questions about items such as fee levels, specific investment strategies, performance, and opinions on future performance. “Performance” is an illusion. The only performance that counts is your account. Each of our …
By Craig Verdi, CFP® “For I have the desire to do what is good, but I cannot carry it out” – Apostle Paul, Romans 7:18 NIV Not carrying out what we want to do. Obviously not a new problem. To be a good investor we must execute. Sometimes, many times, we must do what is right, and not what we …
By Craig Verdi, CFP® My new book, “Mindful Money” details the many thinking errors homo sapiens repeat repeatedly. These errors are responsible for more losses in the market than CNBC! Anchoring: a quick story I am at my millionth conference for investment advisors. This is about 15 years ago. The speaker walks out and with no introduction he declares loudly …
By Craig Verdi, CFP® “You get recessions, you have stock market declines. If you don’t understand that’s going to happen, then you’re not ready, you won’t do well in the markets.” -Peter Lynch It seems you can’t turn on the television without hearing a commercial inviting you to join an online trading system. Or you hear, “trading on your terms” …
By Craig Verdi, CFP® “The Market is the great allocator, from the impatient to the patient” Warren Buffett The financial media loves to make you think you should invest for the short run. Having faith and patience in the long term growth of quality assets does not sell air time. They have to keep you thinking you constantly need their …
By Craig Verdi, CFP® I hear this question a lot more than you may think. The short answer is NO, the market is not rigged. We have the most efficient market in the history of the planet. If Warren Buffet buys a share of Coke (KO) and I buy a share of KO, we get the exact same deal (assuming …