I wrote about people’s irrational sensitivity to gas prices some time ago. This time I’m writing about people’s irrational sensitivity to service price increases. In each case, we are not talking about a lot of money. There are values behind each service. Still, people complain vehemently about the price increases. Debit Card Fees News came […]
Latest Blog Posts
Market Timing: Transaction Costs and Taxes
I continue to look for criticisms of market timing and see how the market timing proponents would answer them. Last time I looked at some criticisms from Vanguard founder John Bogle. I think those criticisms were answered reasonably well. Another major area of criticisms centers around frequent trading, transaction costs and taxes. Critics say market […]
Why Buying On the Dips Is Still All It’s Cracked Up to Be
Wall Street Journal columnist Jason Zweig wrote a puzzling article Why Buying on the Dips Isn’t All It’s Cracked Up to Be. The gist of it is that buying on the dips doesn’t work. I find the article puzzling because it has a weird definition for buying on the dips. It defines a dip as […]
Market Timing: Criticisms From John Bogle
In the previous post Market Timing vs Conservative Portfolio I explored a possible valid reason for market timing. Proponents say that market timing isn’t so much for enhancing returns but for reducing risks. Although market timing underperforms the market, an investor with low risk tolerance would invest in a conservative portfolio anyway, which also underperforms […]
Market Timing vs Conservative Portfolio
After listening to Paul Merriman’s Sound Investing podcast, I found out that Paul Merriman does both indexing and market timing. He said of the $1.5 billion his company manages for clients, about 15% are invested in market timing strategies. That’s quite peculiar. Usually people who follow indexing believe in market efficiency, which says it’s unlikely […]
Save Aggressively, Invest Conservatively
Now we know the story that retail investors run for the hills whenever the stock market hits turbulence is largely a myth. Even during the serious financial crisis in 2008-2009, only 7% of the money invested in stock mutual funds were sold out of those mutual funds. However, even though most investors don’t sell, they […]
Most People Don’t Sell Everything In a Panic
Speaking of not selling, I find this tidbit quite interesting: the vast majority don’t sell anyway. Steve Utkus, Director of Center for Retirement Research at Vanguard, wrote in the Vanguard Blog that during the recent volatile days, between Aug. 1 and Aug. 10, only 2% of all 401(k) participants in plans administered by Vanguard made […]
+/- 5% Rebalancing Bands
When the stock market moves up or down, it can knock your asset allocation off your target. Rebalancing means selling the winners and buying the losers in order to bring a portfolio back to its target allocation. When it comes to rebalancing a portfolio, the 5%-band method is a popular one. It says that you […]
Don’t Sell, But Don’t Buy Either?
When stocks are down, don’t sell. But also remember to buy more. “Don’t sell” is correct only if “buy more” is correct.
Buying Stocks On Sale
I was away for only a week, and look at what happened. After I came out of my seclusion, I heard we beat the clock on the debt ceiling but Treasurys got downgraded anyway. I was surprised to see that my limit buy orders were all filled last Thursday and Friday even though I didn’t […]