Is There Any Hope for Emerging Markets?

Emerging market stocks have been among with worst-performing asset classes this year. While so far in 2015 US stocks are down slightly and international developed stocks are slightly up, emerging market stocks have lost more than 12%. And this isn’t a new phenomenon: in 3 of the previous 5 calendar years emerging market stocks have dramatically underperformed their US counterparts. Is there any hope for this battered asset class?

Topics: Emerging Markets

It’s OK to Take a Loss

Investors tend to be much more willing to sell investments that have increased in value than those that have fallen. Psychologists even have a name for this kind of behavior: loss aversion. But being too eager to sell “winners” and too hesitant to sell “losers” can hurt your investment performance.

How China Affects American Markets

China’s financial markets have been making headlines recently, and generally not in flattering ways. First its bubbly stock market soared and subsequently crashed. Then concerns spread about the country’s slowing economic growth. This week the country’s central bank reduced the value of its currency, the yuan. How much will these events affect financial markets in the US?

Topics: China

What Google’s Restructuring Will Mean

On Monday Google announced that it is reorganizing its business and will create a new company called “Alphabet.” The internet businesses that generate most of the current company’s revenue (such as its ubiquitous search engine and YouTube) will be put into a subsidiary called “Google” that will be owned by Alphabet. The current company’s other endeavors (such as its attempts to build self-driving cars and Nest, its internet-connected household products business) will also be subsidiaries owned by Alphabet but will be separate from the subsidiary called Google.

Topics: Google

How Long Will the Energy Sector’s Struggles Last?

One of the largest upheavals in financial markets during the past year has been the plunge in the price of oil. The price of West Texas Intermediate crude oil (one of the main gauges of “the oil price”) has fallen from over $100 per barrel in July 2014 to around $45 per barrel. This decline has decimated the energy sector, which has lost almost 30% of its value over the past year while the overall US stock market has gained more than 10%. Is the energy sector’s underperformance a short-term aberration or part of a longer-term trend?

Topics: Energy Oil

Inflation Doesn’t Seem Ready for Liftoff

The inflation rate should be an important consideration for investors. It not only affects the price of many investments—particularly those such as bonds which provide fixed periodic payments—but also how much money you need to reach your financial goals. But for all its importance the inflation rate hasn’t moved dramatically in recent years, and it doesn’t seem likely to start doing so any time soon.

Topics: Inflation

Greece Isn’t the Only Political Risk

Following the “no” vote in Greece’s national referendum on whether to accept the bailout terms proposed by its European creditors, the two sides continue to struggle to reach an agreement that would keep the country in the euro zone. For investors, the Greek crisis highlights the importance of “political risk,” the idea that the value of your investments can be hurt by political factors in addition to purely economic or financial ones.

Topics: Political Risk

4 Graphs that Explain Financial Markets in Q2

The second quarter of 2015 was a mixture of calm and frenzy in financial markets. Few asset classes moved dramatically over the course of the quarter, but there were pockets of volatility overseas that drew headlines and put investors on edge. Here are four graphs that explain the key movements in financial markets during the past three months.

Putting the Greek Crisis in Perspective

Following a dramatic announcement of a national referendum on whether Greece should accept the terms proposed by its European creditors in order to continue its bailout program, the country is experiencing a financial crisis. Greek citizens, anticipating that their country will leave the euro zone and that they’ll be left owning less valuable currency, have been lining up at banks to withdraw their money. The Greek government has been forced to close the banks and initiate capital controls to prevent money from leaving the country. The result is substantial economic pain for the Greek people as well as intense geopolitical drama. But how much trouble will it cause for your investment portfolio?

4 Errors Killing Your 401(k) And Retirement Goals

The 401(k) is one of the greatest vehicles for investing in your retirement. According to a 2015 ICI Research Report, 27% of the average American’s wealth is made up of 401(k) and other defined contribution plan assets. Despite the 401(k)’s potentially great benefits, however, too many Americans fail to make the most of its value and maximize their future net worth. Are you: