It is true that one of the best ways to get your money to work for you long term is to invest it in stocks, whether that’s through individual stocks, or some sort of fund. However, many people have rather unrealistic views about the returns they can earn. According to Jason Zweig in The Wall Street Journal, most American investors expect that the stock market will offer an annual return of 13.7% in the next 10 years, and professional investors believe that average long term stock returns will be 11% a year.
Unfortunately, that’s not the case. Zweig reports that …read more

With stock market’s recent troubles (although it is on the way to recovery now), and with so many people concerned about their retirement portfolios, it can be tempting to give in to panic. However, it is important to remember that investing is still one of the best ways to grow a retirement portfolio. The markets will eventually recover (and eventually cycle down again), and chances are that you will be okay — if you have been following a plan with a well-balanced portfolio.
Just remember that the lottery is not a retirement plan. No matter the cynical observations about the stock …read more

Just when it looks like your retirement portfolio might recover after all, a day like today comes along. The financial markets are in turmoil today, responding to all sorts of news — mainly political news. In addition to disappointing housing market data, and the fact that Morgan Stanley’s profit failed to completely wow investors, a couple of unexpected events are shaping the market. And causing the bears to take firm control. With the way things are going, there is a reasonably good chance that the Dow will close down 200 points today.
China tightens monetary policy
Instead of preparing to lead the …read more

The economic outlook for 2010 appears to be improving. Stocks, at least, are rallying this morning in early trading. Many analysts expected measured improvement for 2010. However, it is clear that even with growth, the economy is not going to turnaround quickly. In fact, it is likely that the economy continues its improvements at a relatively slow pace in 2010. This could cause some disappointment for some, who continue to insist that the economic recovery should be moving more quickly. However, it is important to note that a recession nearly a decade in the making (with foundations set through two …read more

The big news from the world of finance today is that the U.S. unemployment rate dropped in November. In the wake of a jobs summit at the White House, the latest numbers for the employment picture are in. And in November, it looks as though the economy only shed 11,000 jobs. This is opposed to the 125,000 that many expected the economy to shed in November. The news also meant that the unemployment rate dropped to 10%
Of course, this positive data does not indicate that a significant number of jobs are being added to the economy — just that the …read more

Yesterday, the news broke that Dubai was experiencing some serious debt issues. Dubai World, which is a financial entity owned largely by the Dubai government, announced that it would be restructuring and that it would be stopping debt payments. This news has shaken world markets. In Asia and Europe, the markets were shaken yesterday. But with the Thanksgiving holiday, it appears that the U.S. reaction was delayed.
This morning, investors work up and sent the Dow plunging more than 200 points. While the losses have moderated so far, with the trading day almost over, there are concerns that Monday could bring …read more

The stock market is heading higher today, as part of a wider global equity rally. Earlier, James Bullard, the president of the St. Louis Federal Reserve, and a member of the Fed board, mentioned that he thought that the economic stimulus measure of buying mortgage-backed securities should continue into next year — moving beyond the first quarter.
As one might imagine, investors latched onto this news and took it as a cue to sell the dollar. After seeing gains for the dollar last week, Bullard’s remarks prompted a round of profit taking. Additionally, the comments also helped stocks. Confident that the …read more

While I’m not always a huge fan of Ben Stein, he does come up with some interesting insights every now and again, and he does have some clever and funny things to say about them. For Fortune Magazine, he recently offered these 4 lessons that he learned from the recession:

Economic forecasting is difficult.
Financial market forecasting is more troublesome than economic forecasting.
The financial sector in this country has lied a great deal.
The government cannot predict the economy or financial markets.

These are, of course, very good lessons to learn. It is important to realize that neither the government, nor the financial “experts”, …read more

Yesterday, we looked at four of the eight tips Investopedia offers for thinking like Warren Buffett. Here are the remaining 8 tips for investing like Buffett:

Consider probabilities: Warren Buffett is a fan of the card game Bridge, in which successful players beat their opponents by considering probabilities. Likewise, you can think of stocks in terms of probabilities. The Investopedia article points out that investors who consider the probability of a good return over 10 years is likely to ride out down cycles to find success in the long-term.
Realize that investing has psychological aspects: We would like to be unemotional …read more

Sure, the man we consider the premier investor of our time has lost billions in this recession. But it’s a recession. Everyone’s going to lose money. And even though he has lost several billion dollars, he’s still got $37 billion, and the only guy in the world that is richer is Bill Gates. Clearly, there are things that we can learn from the “Oracle of Omaha.”
Lucky for us, Investopedia took eight valuable tips from the book The Warren Buffett Portfolio and offers them to the world. Here are the first 4 of the 8 tips for thinking like Warren Buffett …read more