Market Summary – Q4 2011
Fourth Quarter 2011 Global Diversification Fourth Quarter 2011 These portfolios illustrate performance of different global stock-bond mixes. Those with larger allocations to stocks are considered riskier but also have higher expected returns over time. Hypothetical allocations are for illustrative purposes only. Global Stocks represented by MSCI All Country World Index (gross div.) and Treasury Bills represented by US One-Month Treasury Bills. Globally diversified portfolios rebalanced monthly. Data copyright MSCI 2011, all rights reserved. © Stocks,...
Read MoreDecember 2011 Newsletter: Recency Bias
Is “recency” even a word? Not in most dictionaries it isn’t. You’ll get sent back to the tray if you try to play it in scrabble or its popular online equivalent, Words With Friends. Yet the word works very well to describe one of the must‐know biases that affect the way we think in pursuing rewards and avoiding pain, as we do in investing. Behavioral Economists, those deep‐thinking scientists who help us understand why we exercise bad financial behavior when we know better, have coined “recency” to describe our tendency to put more weight than we should on recent events. And what is the cost...
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