Investors often encounter the terms value stock and growth stock. Perhaps you participate in a 401k that offers mutual funds that invest in one type of stock or the other. The terms may seem confusing. How can a stock be a good value unless it produces growth? (more…)
Archive for the ‘Stocks’ Category
Value Stocks and Growth Stocks
Monday, July 26th, 2010Q2: Stocks Down, Thankfully
Thursday, July 1st, 2010The second quarter has come to a close with the stock market roughly 10% below the highest levels reached in April. With apologies to retirees living off their investments, the rest of us can celebrate. We’re going to benefit from the decline. At least, we will if we keep our heads. (more…)
The Prediction Paradox
Monday, May 24th, 2010Why can’t people do a better job predicting the stock market? It isn’t just ordinary folks like you and me that have problems. Even the experts get it wrong about as often as they get it right. How hard can this be?
It turns out to be very hard. We don’t have a reliable way to predict stock prices — and we never will. The reason can be found in something I call the prediction paradox. (more…)
How Spreads Cost Investors Money
Monday, May 17th, 2010People who buy and sell stocks are aware of the brokerage commission they pay on those transactions. Many of them aren’t aware of another cost — a hidden one — called the spread. The spread can be insignificantly small, but it doesn’t have to be. This is one of the reasons frequent trading tends to produce inferior results. (more…)
