Investments

Have you ever made yourself suffer through a bad movie because, having paid for the ticket, you felt you had to get your money’s worth? Some people treat investment the same way. Behavioral economists have a name for this tendency of people and organizations to stick with a losing strategy purely on the basis that they have put so much […]

For an in-depth look at the world capital market performance and a timeline of events during the past quarter, here is our Quarterly Market Review: About Christopher Jones Christopher Jones is the Founder and President of Sparrow Wealth Management, a fee-only financial planning and investment management firm. Before entering the investment field, Chris was a management consultant for Deloitte Monitor. […]

If you check out the news headlines regularly (not recommended!), it can be unsettling to hear about the worldwide stock market swings of the last three weeks. Stock market declines were in the news again today after new reports of an economic slowdown in China. Here are a couple of things to think about as you assess the news: We […]

Global markets are providing investors a rough ride at the moment, as the focus turns to China’s economic outlook. But while falling markets can be worrisome, maintaining a longer term perspective makes the volatility easier to handle. A typical response to unsettling markets is an emotional one. We quit risky assets when prices are down and wait for more certainty. […]

As you are probably aware, we’ve had an “interesting” week in the markets.  Investors are understandably anxious given the recent volatility.  A few of the headlines you may have seen include: The Dow’s more than 1,000-point drop this week was the largest weekly drop since the week ended Oct. 10, 2008. The S&P 500 declined 3.2%, taking its losses from […]

The media occasionally locks in on a particular ‘hot’ sector. In the late 1990s, it was technology. In the mid-2000s, it was mining. Writing headlines about fashionable sectors is one thing. Building investment strategies around them is another. A reason journalists focus on particular industries or sectors is that these stories fit into a chosen narrative. In the case of […]

Notice how TV news bulletins put finance next to the weather report? In each, talking heads point at charts and intone about intraday events that are quickly forgotten. Meanwhile, the long-term wealth building story gets overlooked. Many investors feel that they are not properly informed about the financial world unless they have checked daily, or even hourly, on how the […]

Every investor is familiar with the phrase, “invest in what you know.” Taking this advice leads to an undiversified portfolio with higher risks and lower returns. This psychological tendency is called familiarity bias, which must be avoided in order to become a diversified investor. I’ve noticed that many people have a significant portion of their retirement savings devoted to their […]

In the popular TV program MasterChef, contestants face a series of cooking challenges. From low quality ingredients to inadequate preparation and poor implementation, so many things can, and do, go wrong. It is a bit like investing. In the world of investment, there customarily are two broad approaches. The first is a traditionally active one: Managers attempt to find mispriced securities […]

Working with markets, understanding risk and return, diversifying and portfolio structure—we’ve heard the lessons of sound investing over and over. But so often the most important factor between success and failure is ourselves. The recent rocky period in financial markets has brought to the surface some familiar emotions for many, including a strong urge to try to time the market. […]