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Performance chasing is common in investing. Not investing based on momentum strategies per se, but choosing funds, money managers and newsletters based on recent performance. Institutional investors (pensions, endowments, etc.) are as guilty as individual investors when it comes...

Last week’s commentary about how tolerance for risk changes with age prompted a few readers to respond. Most of the emails I received focused on defining what risk is. In the world of finance, risk has more than one definition. Risk questionnaires often try to assess a person’s...

An investor’s willingness to invest in stocks varies with the level of the S&P 500 index and other major indexes. Similarly, in aggregate, older investors tend to be more conservative than younger investors. Neither statement should be a surprise to those of you who have been...

As the bull market nears its ninth anniversary, the backdrop is evolving. This year has already seen more days with the S&P 500 index closing up or down by 1% or more than we saw during all of last year. Deflation—a concern not so long ago—has been replaced by worries about...

On my must-read list is Warren Buffett’s annual letter to Berkshire Hathaway (BRK.B) shareholders. Even if you are not a Berkshire shareholder (like I am), the observations on the financial markets and investing are often priceless. This is year was no different. Though Buffett’s...

One driver of stock price returns debated among research papers is the size premium. The size premium—also known as small minus big (SMB)—is the historical outperformance of small-company stocks relative to large-company stocks. The continued existence of this so-called anomaly...

The new tax law provides a few incentives for taking advantage of Roth IRAs and similar types of retirement accounts. It also preserves the contribution limits in effect prior to this year for both tax-deferred and aftertax accounts. Roth IRA conversions, however, can no longer...

The return of downside volatility has exposed problems with perception and with certain exchange-traded products. On Tuesday, the front page of the Chicago Sun-Times declared, “Dow’s Historic Drop: 1,175-point plunge—its biggest one-day loss in history—puts the once-roaring...

Starting on Monday, industry regulator FINRA will require brokers to ask for a trusted contact when an individual investor opens an account or a firm is updating client information. A trusted contact is a person the brokerage firm can contact if financial exploitation is suspected....

Even with last weekend’s government shutdown, no agreed-upon budget and yet another debt ceiling increase needed, the major U.S. indexes continued to set record highs. While Mr. Market’s ongoing calm mood may seem paradoxical given what’s happening inside of the Beltway, one...