Volatility, noise and the big picture

It is easy in volatile markets like we have at present to get caught up in the day-to-day action.  Most investors have a much longer time horizon than do the markets.  Most investors would be best served by turning off CNBC and focusing on the long term.  We came across a handful of items that try to put both the overall market and investing strategies into some longer term context.

I understand that most people reading investment blogs are focused on actionable advice with a shorter-term time frame.  However it is worthwhile revisiting some investment results that reflect on both short and long term investors.  For instance looking at how momentum and credit ratings distinguish amongst stocks is important no matter how you slice and dice things.

The bottom line is that we live in a noisy financial world.  Sometimes it make sense to step back and look at the bigger picture.

Items worth a read:

Better times are ahead if market patterns persist.  (WSJ)

Taking a stab at estimating equilibrium risk premia on various asset classes.  (Capital Spectator)

Buy-and-hold is a distinctly American phenomenon.  (Free exchange)

Stock returns by debt rating.  (Falkenblog)

The long-term power of momentum.  (Crossing Wall Street)

[repeat] Updating the Swensen portfolio circa 2005.  (Abnormal Returns)


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  • Tadas ViskantaAbnormal Returns has over its seven-year life become a fixture in the financial blogosphere. Over thousands of posts we have striven to bring the best of the financial blogosphere to readers. In that time the idea of a “forecast-free investment blog” remains as useful as it did six years ago. More »

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