We’re always looking for signs of overly exuberant fund investors to guide our investing decisions. When fund investors get very excited about a specific fund, a category of fund, or even investing in general, it often pays to do the opposite, or at least ease up on whatever is catching their fancy. New fund launches—their volume and relative asset-gathering success—are tops on our list of contrarian indicators. ...read the rest of this article»

The end of the year is a tough time for fund investors. December is when most fund companies make large taxable distributions. December is particularly punishing after a few good years of stock market returns, which can lead to gains on the fund’s books that have to be distributed. These distributions are not good things. Unfortunately, year-end distributions are hard to avoid completely. ...read the rest of this article»

The big story lately is the incredible earnings growth of corporate America. As earnings are the core to long-term stock market returns, this is good news – certainly a better foundation of investment than boundless revenue growth or market share growth or user growth or even that “potential future maybe revenue growth” that was driving stocks a few years ago.  ...read the rest of this article»

Now that the stock market is past record highs again we are seeing resurgence in investor enthusiasm. Investors appear to be subscribing to the same pattern of investment idea generation that got the major indexes so ridiculously overpriced in the first place: letting backward-looking information and scenarios guide your current investment decisions. Call it what-ifs, woulda-coulda-shoulda strategies, or just investment soul searching. ...read the rest of this article»

As we've noted before, early this year fund investors were plowing tens of billions into funds – right before the market caved in. Now that market is rebounding, and inflows have improved again. This sort of buy high/sell low/buy back high is exactly why fund investors typically underperform the market, and why we try to do the opposite of what most investors do. ...read the rest of this article»

Inflation is increasing and economic growth is slowing. The Federal Reserve knows they created inflation with their recent stint of economic stimulus, but is worried attempts to cool the economy could cause a major recession. If they take a wait and see stance, inflation could spiral out of control even with a slow economy – the dreaded stagflation of the 1970s and early 80s ...read the rest of this article»

Let’s check in with what fund investors are doing – and as usual, consider doing something else. ...read the rest of this article»

While we have nothing against shopping around for a high-yield CD, we think you can do better with low-fee bond funds most of the time. In fact, our general forecast for stocks coupled with our risk aversion in our lower risk portfolios is why we own bond funds. ...read the rest of this article»

In case you’ve missed the nonstop media coverage, gasoline prices are again approaching $3 a gallon. Does this “crisis” situation offer any investment opportunities? Can it derail the economy and stock market? And why is gas so expensive anyway? ...read the rest of this article»

Oddly enough, the mundane (and molasses-in-winter slow) market events tend to hurt investors more over the long haul than sudden drops. Even adjusting for inflation, investors lost far more in 2002 than they did in 1987 - the year of the biggest one-day market decline in history.  ...read the rest of this article»