Investors are prone to recency bias, a key aspect of behavioral finance that favors recent events over historic ones, and as an example, can result in focusing on companies that have generated the best returns in recent years as opposed to taking a longer view. What's important to remember is that, over time, each area of the market has its moment in the sun; internet stocks in the late 90s, commodities and real estate in the early 2000s, alternative investment strategies during the global ... [Continue Reading]
Articles and resources related to Diversification.
Diversification is a critical component of CCM's investment strategy. In this video, Investing's Free Lunch, Adam Hoffmann, CFP®, AIF® discusses why intentionally giving up some return to reduce risk can result in a higher-yielding portfolio in the long-run. NOTE: The information provided in this video is intended for clients of Carlson Capital Management. We recommend that individuals consult with a professional advisor familiar with their particular situation for advice ... [Continue Reading]
Markets, Values, and Expectations Are in a Much Different Place Now On this day one year ago, the S&P 500 closed at 2,237. 1 Investor pessimism about the ramifications of a global pandemic were at a peak, and it was becoming clearer that this health crisis was going to turn into a severe economic downturn. The S&P 500 closed that day down 33.9% from its all-time high of 3,386, set just a few weeks earlier on February 19. 2 The intensity of this market ... [Continue Reading]
Reflecting on a year gone by is often, at least to some extent, an exercise in revisionist history. This isn’t necessarily a bad thing; many of the differences between our memories and experiences are minor and inconsequential. In some cases, the variations in these realities can help us persevere and move out of the past and into future endeavors. But as investors, revising the memories of the past can be problematic and potentially hinder future success. Behavioral finance is the study of ... [Continue Reading]
As a companion to the article CCM Senior Investment Strategist James Yaworski, CFA, wrote—Déjà Vu—2020 or 1999?—CCM Founder and CEO Greg Carlson, CFP® interviews James to gather a bit more detail on how today's market performance compares to that of 1999. NOTE: The information provided in this video is intended for clients of Carlson Capital Management. We recommend that individuals consult with a professional advisor familiar with their particular situation for advice ... [Continue Reading]