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Investing 101 Archive

  • Despite all our good intentions, it is often said that we are our own worst enemy for the many foolish things we do that come back to hurt us. Nowhere is this saying more relevant than in the world of finance, where bad decisions are the norm not the exception. Even the smartest superstar fund managers will readily admit their mistakes and chalk them up to some contorted form of tuition.

    It is in this spirit that veteran investor, advisor and commentator Barry Ritholtz penned a recent column extolling the virtues of simplicity when it comes to portfolio planning.

    In this installment of Investing 101, the CEO of Fusion IQ and author of The Big Picture blog lays out five tips to keep things simple and increase your chances for success.

    1. Go Passive

    Simply put, Ritholtz says, "Most investors are far better off with a passive index than trying to pick the next great manager." Sure it is tempting to chase a highly decorated fund or hot performer. However, "80% of managers underperform each year and that it's a different 80% each year," which is enough to give Ritholtz pause. He will tell you the behavioral ramifications just aren't worth it when you add in the "cost, taxes and expenses of constantly chasing the hot hand."

    2. Diversity Across Asset Classes

    According to Ritholtz, when it comes to diversifying your investments it isn't just about stocks, bonds and cash anymore. He suggests that a broader selection will serve you well. He goes on to say that investors would be wise to add some real estate or REITS, perhaps a 10% exposure to commodities, as well as other types of bonds than U.S. Treasuries, including corporates, high yield, municipals and maybe even some foreign debt too.

    Read More »from Investing 101: Keep it Simple to Succeed, Says Ritholtz
  • Money, power and politics were some of the earliest reasons for marriage in Western civilization. Today those same reasons are among the leading causes of divorce.

    “Interestingly enough, 60% of divorces are caused by money problems,” says personal finance expert Carol Pepper, author of The Seven Pearls of Financial Wisdom. “That’s the number one cause of divorce; it’s not infidelity, it’s money.”

    And Pepper has seen plenty of it as an investment manager and adviser to families who have over $100 million in assets, which includes a role as portfolio manager with the Rockefeller estate, overseeing $1 billion in assets.

    She explains that keeping track of your finances can be challenging, and when you add another person into the mix of bank accounts, bills, assets and investments, it could become an outright disaster.

    On this Valentine’s Day, our Investing 101 series highlights four steps to successfully merge your money as a couple.

    1. Maximize Your Incomes

    “Once you’re together and you’re in love and you’re thinking like a team, really think about who’s the best person to earn money for the family,” says Pepper.

    Read More »from Merging Your Money as a Couple
  • Since introduced in 1993, exchange traded funds, or ETFs, have changed the way many individuals invest in equities. In prior eras investors would gravitate towards well-known mutual fund managers like Peter Lynch at Fidelity, but today many are putting money into ETFs.

    In this edition of Investing 101 Breakout explains how ETFs differ from mutual funds and how investors can tell which are right for their portfolios.

    ETFs Don't Have Mutual Fund Fees

    It's easy to confuse ETFs with the traditional funds. Kelly Campbell, founder and CEO of Campbell Wealth Management, explains that, while both mutual funds and ETFs are pools of invested money, ETFs aren't actively managed.

    As a result of this "hands off" approach to investing your money, ETFs don't come with the often onerous fees associated with mutual funds. Back in the days of star money managers, a mutual fund could charge multiple percentage points just for the privilege of taking your money. Those days are gone.

    ETFs Still Have Market Risk

    Mutual funds may have fallen out of favor after the hot-shot fund managers failed to protect investor money during the volatility of the last ten years, but that doesn't necessarily make ETFs safer.

    Read More »from Mutual Funds vs. ETFs: Which Is Right for You?


(57 Stories)


Breakout’s Investing 101 helps you gain insight on money management and trading. Whether you’re managing your own retirement account, just beginning, or an advanced investor in need of a good refresher, Investing 101 will help you learn, grow, and keep you informed of the basic steps to effectively manage your money. Expect investing tips that focus on trading strategies, asset allocation, and portfolio management.

Investing 101

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