The economy and markets are heavily influenced by purely psychological factors. People spend or invest based on fear, optimism, and expectations for the future. Consumers and investors make decisions based on tangible factors like wage growth and tax rate changes, but they're also surprisingly motivated by fluctuating optimism. It's entirely possible that most booms and busts are largely caused by swinging collective expectations. ...read the rest of this article»

We run a huge mega-database each month to calculate things like our MAXratings and to identify the most attractive (generally less popular) investment areas. In addition to our regular calculations, we also look at composite performance data. Each time we  evaluate the thousands of open-end funds vs. hundreds of ETFs,  the average mutual fund beats the average ETF. The ETFs are cheaper, and most have less turnover. Why is this? ...read the rest of this article»

Stocks have been going great guns since we hit the bottom of the financial meltdown in March 2009. We generally try to increase our stock allocation on the way down and cut back on stocks as they climb and investors grow more optimistic. ...read the rest of this article»

Our own relatively small foreign stock and cash allocations kept our portfolios more or less in line with a blend of U.S. stock and bonds. Our sharp underperformers (longer-term bonds and foreign markets) were balanced by good gains in financials, Japanese stocks, and healthcare. Still, it was no quarter to brag about.  ...read the rest of this article»

Predictions about rates having nowhere to go but up might have looked equally correct half a dozen times in recent years – yet been wrong. ...read the rest of this article»

With the market maintaining a perpetual upward trajectory in 2013, it could be time to revisit our theories about crashes and market peaks. ...read the rest of this article»

I reckon we’ve been talking about this here gold bubble in them thar hills for quite some time. Thankfully, the market gods have finally deigned to demonstrate exactly why we shouldn't be worshiping this particular golden calf. As of this writing, gold is down 27% from the highs it reached in September 2011. It fell 8% on Monday alone. ...read the rest of this article»

Many factors could trigger another major slide in the next few years, which is why stocks are intrinsically riskier than most bonds and cash. Yet it's possible to estimate an expected total return over, say, the next 10 years. ...read the rest of this article»

Someone once said that the only perfect hedge is in a Japanese garden. Here are a few typical strategies for minimizing downside (and upside…) in a portfolio, with some brief notes on the imperfections of each, especially in light of an ever-shifting landscape. ...read the rest of this article»

Although the European economy appears to be on the mend, with  some of the biggest financial misfit euro-area countries now able to borrow again, U.S. hijinks should continue for much of 2013, since many of the decisions that need to be made about the debt ceiling and spending cuts were largely kicked down the road for later theatre. Are you not entertained? ...read the rest of this article»