Showing by category: Investing

Forget the S&P500 Level – It’s the PE10 Value that REALLY Counts
I was having a discussion with some Valuation-Informed Indexing skeptics when the words popped out of my head -- “An S&P 500 priced at 1,000 when the PE10 value is 30 is the same as an S&P 500 priced at 500 when the PE10 value is 15.” That’s a pretty darn simple way of making the es Continue Reading
How Do You Pick Stocks?
Do you like to make your own stock picks? Or have you thought about it but just don’t know where to start? The maturing of the bull market in the past five years has to have some of us thinking that there’s got to be a better way to pick stocks - an inside secret even. Most of us go with mut Continue Reading
Five Reasons Why 2014 May Be Another Great Year in the Stock Market
This week I’ve been writing about the potential for a major reversal of the stock market this year in Gravity - The Stock Market’s Mortal Enemy, and how it wreaks havoc for small investors in particular. In the interest of balance - and to concede that my opinions on the direction of the stock m Continue Reading
Gravity – The Stock Market’s Mortal Enemy
On January 14, 2000, the stock market hit an all-time high, with the Dow Jones Industrial Average reaching 11,722.98. On October 9, 2002, the Dow was at 7,286.27 - a decline of nearly 40% in less than 21 months. Five years later, on October 9, 2007, the market hit a new all-time high with the Dow Continue Reading
Online Stock Trading versus Buy-and-Hold
On this site we have long taken the position that buy-and-hold is a potential suckers bet. That has never been more true than it is right now. With the stock market churning in record territory, you may be better off holding individual stocks through online stock trading, rather than holding funds t Continue Reading
Is the Stock Market Rigged???
On the surface, contemplating the answer to this question seems merely…interesting. That is, if you’re given to this type of speculation at all—otherwise it may fall somewhere between garden variety conspiracy theories and aliens in the cornfields. So why even ask is the stock market rigged? Continue Reading
I am often asked how Valuation-Informed Indexers should go about changing their stock portfolio allocation in response to changes in valuations. Set forth below are descriptions of five strategies that are supported by the academic research. 1. The Cliff Approach If simplicity is your most i Continue Reading
Buy-and-Hold works after the passage of 30 years. I’ve said that before and I stand by the comment because there is a sense in which it is so. However, there is also a sense in which it is NOT so. The purpose of this article is to present both sides of the story. Buy-and-hold's Finest Hour Continue Reading
Having Too Much Investing Information Is Just as Bad as Having No Investing Information At All
Brett Arends included a throwaway line in an article he wrote for the Wall Street Journal in 2010 that I thought was so important that I included the article in the “Links That Matter” section of my site. He said: “Valuation is by far the most important issue for investors.” Those of us t Continue Reading
Michael Alexander reports on the results of a test of market efficiency in his book Stock Cycles. He categorized each month in stock return history from January 1802 through December 1999 as offering an above-average return or a below-average return. Then he checked how many of the sequential 50-mon Continue Reading