Volatility, noise and the big picture
- September 13th, 2011
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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- Monday links: global market turbulence
- Top clicks this week on Abnormal Returns
- Saturday links: the halo effect
- Friday links: all the tools you need
- Podcast Friday: personal investment policies
- Thursday links: spend a little
- Why volatility matters
- Comparing the robo-advisors
- Wednesday links: the end of the relentless bid
- Q&A with Patrick O’Shaughnessy author of Millennial Money