Articles: Investing Basics


Twenty things you should know before you invest in a mutual fund
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October 15, 1999
We recommend mutual funds for most investments. This article presents 20 ways to make your funds work hard for you.

Twenty things you should know about Roth IRAs
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May 18, 1998

For most of the past two decades, every January has been a time of heavy hype for IRAs as banks, mutual funds and brokerages vie for Americans’ retirement money. Now the hype has escalated with the introduction of the new Roth IRA. It’s been called everything from a dangerous boondoggle to the greatest gift Congress ever gave individual investors. I think the truth lies somewhere in between. Used correctly, a Roth IRA can be a terrific tool for building a significant nest egg over a lifetime of investing. Used incorrectly, it can be an expensive mistake.

Sixteen reasons you should sell a mutual fund
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August 26, 2001

Everybody seems to want you to buy mutual funds. The advertisements and sales pitches in newspapers, magazines and in the offices of financial planners all tell you to buy. The articles in the popular and financial press tell you to buy. But in the life of every investor there is a time to buy and there is a time to sell – and the selling decision gets short shrift in financial publications. The articles that tout the "best funds to buy now" rarely are followed up later with articles on which of those funds to sell, and when.

Fund Wars: how to choose the best performing mutual funds
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August 26, 1997

If picking mutual funds were as simple as buying those with the best recent performance, accumulating wealth would be a cinch. Pretty soon, we’d all be billionaires. While this is obviously impossible, too many investors continue to chase performance. Mostly, that chase is in vain.

Does diversification work?
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August 26, 2000

You know we advocate diversification as one of the best ways investors can enhance returns and manage risks. We know that asset allocation, a fundamental form of diversification, is the most important decision an investor makes.

The importance of discipline
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December 24, 1996

One of my favorite newsletters is The Hulbert Financial Digest. Their job is to track the performance of newsletters like ours. The following is an article from the October 21, 1996 issue that I found interesting. (Reprinted by permission, The Hulbert Financial Digest, 316 Commerce Street, Alexandria, VA 22314, 1-703-683-5905. Or contact their web site at... http://www.hulbertdigest.com.

The $64,000 Question: What returns can you expect?
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July 06, 2000

Just about every day somebody asks me what I think the market is going to do for the rest of the year, or over the next quarter – or even the next week. I’m not qualified to make that kind of prediction and I don’t think it’s very useful. But I am often asked a more interesting and useful question: "What is a reasonable rate of return that I can expect on my investments over a long period of time?"

Alan Greenspan and the Federal Reserve System
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July 06, 2002

What is the Fed?

The Federal Reserve System, popularly known as "the Fed," is an unusual federal agency created in 1913 to give the government some control over banking, which at that time was mostly unregulated.

Why mutual fund performance figures are misleading
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April 06, 1999

We believe market timing is an important tool to help investors achieve the returns they need while reducing their exposure to unpleasant surprises. But that is true only for systematic market timing. Unfortunately, many investors use timing not as a discipline, as we do, but as an informal and unpredictable expression of their own emotions, primarily greed and fear.

Investment guidelines from the famous
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September 09, 1997

Any student of investing has seen lists of rules or slogans. "Buy low, sell high." "Cut your losses but let your profits run." "Better safe than sorry." Sometimes all the rules get pretty confusing. Some rules sound quite sensible, until you find other rules that seem to say just the opposite. For instance, "get expert advice" is a common rule. But you'll also read or hear "make your own decisions" and "don't follow the crowd." Many investment writers and money managers will advise you to "invest for the long-term and be patient." Others will say you should "be ready to move quickly" or "timing is everything" What's a conscientious investor to do?

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