5 Common Financial Planning Mistakes

Month: May 2013

May 22, 2013  |  

5 Common Financial Planning Mistakes

Do-it-yourself investors make some common mistakes with their investments. These mistakes usually lead to below average returns in the market. In fact, a recent study by the firm Dalbar shows that from 1992 – 2011 the average investor returned 3.49% annually whereas the S&P 500 Index returned 7.81%. Having a good advisor at your side can help you to avoid making the same mistakes which will help you attain your financial goals. So what are […]

May 16, 2013  |  

Managing Household Records: Create Your Filing System

In the previous post about managing household records, we talked about what files you should actively keep, what files you should keep in storage, and what files you can discard. Today we will discuss how to create your filing system so that you know where all of your important documents are located. Create Your Filing System Generally, your home file should include all the items you refer to frequently including bills, warranties, bank statements, etc. […]

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May 14, 2013  |  

Managing Household Records

Spring cleaning and tax season come every year and with them come questions about what to keep and what to throw away.  How long do I need to keep my tax returns?  Receipts?  Brokerage trade confirmations?  Having a system to find all of these records is just as important as deciding which records to retain so let’s start there. After gathering all of your important papers, divide them into 3 piles: an active file, dead […]

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May 8, 2013  |  

Distribution of Market Returns

While no one can reliably predict the future, the past may offer perspective on recent market events and the long-term benefits of equity investing. The chart below shows the historical distribution of US market returns since 1926. The performance years are stacked in order of return range with the far left including the years with the greatest market decline and the far right including the years with the greatest market gain. Each rectangle represents a […]

May 6, 2013  |  

The False Hope of Market Timing

While I have mentioned the failure of market timing on many occasions in the past, it bears repeating. Market timing does not provide a good foundation for an investment strategy. Markets are too efficient to allow market timers to reliably forecast the future. In short, market timing offers false hopes to investors. The harsh reality of market efficiency has not stopped speculators and other traders from attempting to read the future. On paper, market timing […]