You Asked, So We’ll Answer FOQ: What Is a Correction? Short: A drop of at least 10% from a recent high. Long: You can’t watch the news without hearing “correction” these days, as we’re right in the middle of one. Why does 10% matter? Well, 10% is an arbitrary number. Why not 9%? Or 11%? We can all agree that being down 9.9% hurts as much as 10%. But the media latched on to this concept and ran with it. Nothing sells advertising like some good, ol’ fashioned panic! FOQ: How Often Do They Occur? Short: A lot. …
It’s OK – We’ve Been Here Before
In fact, it’s a good thing. Really. How can a down market be good? Well, without down markets, we would not have much of an up market. Stocks have averaged about 10% forever. And that’s more than cash, bonds, commodities, CDs, gold and other metals, annuities, currencies, collectibles, and just about anything else. But for that long-term reward, we must absolutely experience some short-term suffering. They are inextricably related. Anything said to the contrary is either a sales pitch or a lie. And all the evidence tells us that attempting to maneuver around times like this will likely result in …
Frequently “Oaked” Questions
You Asked, So We’ll Answer Introducing our new segment, FOQs, where we’ll answer some of the most common questions we’ve been getting in the last couple months or so, from clients, friends, family, or anyone curious enough to ask. As usual, we’ll be straightforward, transparent and blunt. It’s the only way you’ll get the info you need to become a great investor, or remain as one. Each question will have a short, one-word to one-sentence answer, for those of you in a time crunch, and a long answer for a bit more insight. Here we go! FOQ: The news says …
What Is Risk, Really?
It Comes From Within The boring, formal and – frankly – useless answer to the question: Risk is the probability or likelihood of occurrence of losses relative to the expected return on any particular investment blah, blah, blah…who cares? Wake us when it’s over. Sure, we care about risk. After all, it’s one-third of any investment, along with cost and return. But that definition doesn’t get to the heart of the issue. Every day there’s a probability that we lose money that day. But no one’s panicking over that. Until, in the midst of our busy lives, that probability …