A few weeks back, Dr. Richard Thaler won the Nobel Prize in economics for his work on behavioral finance. Anybody associated with SEM the last few years is quite familiar with his work as it along with others in the field has been the major driver behind the re-design of
Nobody rings the bell at the top of a bull market telling us the fun times are over and to prepare for the bear market. Markets can go up far longer than most of us can imagine, which is what makes them so dangerous to investors. The seemingly resiliency of
With the Dow starting the week on an 11-day winning streak it is safe to say the animal spirits are alive and well on Wall Street. This isn’t necessarily a reason to sell stocks immediately, but it should be a reminder the potential for future gains is limited.
Human nature does not change. Going back at least to the time of Moses we see humans letting their emotions getting in the way of sound decision making. The Israelites were slaves in Egypt for hundreds of years and saw miracles from God that led to their release from Egypt.
Whether it is an objective measurement of a bubble using past valuation levels or our own subjective observation of investor behavior, it is clear we are in some sort of a bubble.
How can you (or your clients) avoid participating in the next market crash?
