Monday, September 09, 2013

Coffee Break (from Jim Parker, DFA Australia)

Useful Articles from the Web

The biggest communications challenge for financial professionals these days is rarely lack of information. The challenge often is accessing the right information quickly and in a form that suits the market you are seeking to service.

This new regular item points to potentially useful links in communicating the principles of sound investment. How you use them is up to you – whether in a newsletter, blog, client meeting or just to spark your own ideas.

We don’t necessarily endorse everything in these links, but we’re sure there’s something you can use. And if you see something worth reading, let us know here.

In the popular 1990s US sitcom Seinfeld, the hapless George Costanza ponders that his fortunes might change if he stops giving way to his first impulse on everything and instead does the opposite. It’s a lesson we might heed in investment as the media pushes us toward “popular” stocks. Larry Swedroe of CBS News explores the Seinfeld connection.

We see them on the TV news every night. They are always making sage and convincing sounding forecasts about the outlook for growth, interest rates, currencies and shares. But economists actually have very little to teach us as investors, as blogger Barry Ritholtz explains.

The pubs of the world are full of people big noting about how they beat the market by getting in or out at just the right time. But the truth is even a well-orchestrated entry and exit will not guarantee you beating a diversified portfolio that is rebalanced periodically.

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