Are past prices clouding your judgement?

We all have a lot of trouble buying stocks that have gone up a lot and selling stocks that have gone down. If that’s you then I regret to inform you that you are being affected by a well-established financial concept that only affects soft-brained investors. It is called “Anchoring”. Anchoring, also known as ‘focusing…

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How to change a Culture

I once had a holiday job with Mercedes Benz in their International and Diplomatic sales show room in Green Park just opposite the Ritz in London. My job was to escort the guy who took the deposits to the bank. No big deal you might think but when the Ambassador of King Gotalotadosh from a…

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What is the Average Return of the ASX?

So what is the truth? What is the average return from the stock market? Fourteen per cent, nine per cent, or something else? I have done the calculation for you. If we use the All Ordinaries Total Return index (it used to be called the Accumulation Index) which includes all cash dividends reinvested on the…

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don t short the blue wave

Don’t be short

DEMOCRATIC SWEEP A bit ho-hum today but a major market theme is developing. The Blue Wave chatter has morphed into a new phrase in the newswires – “Democratic Sweep”. This is an image from a US article titled “Wall Street prepares for the blue wave Democratic sweep“. The Bull market is getting ready to emerge.…

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The Problem with ETFs

An important bit of ETF education. Here is an extract from an article by James Kirby in The Australian about the risks of some exchange traded funds. The article highlights one of the major risks of ETFs: “A coalition of the world’s biggest fund managers is pressing for consumer protection reforms in the booming Exchange…

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