Risk and Return are Joined at the Head

I found this article on Risk & Return (By Chuck Jaffe, MarketWatch) to be worth reading.



BOSTON (MarketWatch) — Some people are afraid of making a mistake by taking on risk, while others take risks that lead to mistakes.

Such behaviors are the focus of the new book “Investment Mistakes Even Smart Investors Make … and How to Avoid Them,” by Larry Swedroe of Buckingham Asset Management in St. Louis, who is one of the most thoughtful financial advisers.

No matter your feelings about the market — if you think the current run will continue or you expect a downturn – the mistake comes when you let those feelings override long-term strategy.

That’s what investors need to guard against now. And anyone who avoids the bulk of the book’s 77 different errors is likely to reach the end of their investing lifetime pretty happy with the results.

That said, no blueprint will help an investor avoid all of the potential and theoretical booby-traps. Moreover, even the best investors make mistakes; the key is to avoid the giant ones from which there is no recovery, and to avoid being bled to death by an endless series of small errors.  Read the complete article here:

Risk and return are joined at the head – Chuck Jaffe – MarketWatch.

Whitney Houston: Estate planning lesson in a sad, untimely death

The premature death of pop star Whitney Houston should serve as a concrete reminder to financial advisers to make sure that wealthy clients properly fund the trusts that they have set up for their heirs and that they update estate documents every few years.

“Celebrity stories like this are a great educational tool to share with clients and highlight what should be done, what was done wrong and what was done right,” said Andy Mayoras, a Michigan estate planner.

At this point, it is too early to say what kind of shape Ms. Houston’s estate was in when she died.

via Whitney Houston: Estate planning lesson in a sad, untimely death – InvestmentNews.

What to Do With Your Tax Refund


NEW YORK (MainStreet) – Simply utter the words “Tax Day” to friends and they’ll likely respond with a cringe and some serious eye rolling. Yet despite the stress and drudge many associate with filing tax returns, there is a light at the end of all the paperwork: the glorious tax refund.

As MainStreet has reported, it isn’t exactly a good thing to get a large refund, because that just means Uncle Sam is handing back the money you loaned it all year – without paying you any interest. But many still prefer to receive that big, fat check in the mail anyway.

Last year’s average refund wasn’t too shabby, coming in at $2,985, according to the IRS. And Larchmont, N.Y.-based tax attorney Julian Block predicts this year’s refund to be “a shade over $3,000” on average, such as around $3,050.

via What to Do With Your Tax Refund – MainStreet.

Invest With the Silent Minority

A routine report from Morningstar contains some great advice for investors, if you know how to interpret it. The report notes that passively managed funds basically index funds had a net inflow of more than $76 billion in 2011. In stark contrast, actively managed funds, where highly paid fund managers attempt to beat the returns of a designated benchmark, had net outflows of $9.4 billion.

via Invest With the Silent Minority – On Retirement usnews.com.