Op-Ed: How home bias could be putting your wealth at risk By: Dennis Morton and Cody Demmel, Contributing Writers February 26, 2021
8:31 am
“Invest in what you know.” – Peter Lynch
Successful wealth management requires us to construct diverse investment portfolios made up of different asset classes, including stocks. In choosing our investments we often have biases that unknowingly create challenges as market cycles change.
Peter Lynch, famed manager of the Fidelity Magellan Fund, popularized the idea that investors could succeed by picking stocks that they knew best. Put into practice in 2021, that might sound like this: I use Amazon Prime. I understand the value of the service and how it will grow over time. Therefore, I will buy Amazon stock.
Successful wealth management requires us to construct diverse investment portfolios made up of different asset classes, including stocks. In choosing our investments we often have biases that unknowingly create challenges as market cycles change.
Modern Portfolio Theory: How it Can Improve Your Portfolio
Modern portfolio theory (MPT) is an investing strategy that looks to maximize returns. After all, we like making money, but we dislike losing money even more. Generally speaking, of course.
That was crystal clear when the market dropped 12.8% in one day in March of 2020. With fear and more importantly uncertainty about the coronavirus raging, many investors briefly panicked.
As we now know, the market snapped back almost as quickly as it declined. But at the time, the possibility of losing money drove millions of investors to get cold feet. Many probably gave up future returns due to that fear and uncertainty.
How To Manage Real Estate Investment Risk With Diversification benzinga.com - get the latest breaking news, showbiz & celebrity photos, sport news & rumours, viral videos and top stories from benzinga.com Daily Mail and Mail on Sunday newspapers.
That reduction in benefits could change dramatically
for the worse once the pandemic is factored into the equation.
Medicare Part A
The conclusion of the trustees report reads like an ominous warning:
Lawmakers have many policy options that would reduce or eliminate the long-term financing shortfalls in Social Security and Medicare. Taking action sooner rather than later will permit consideration of a broader range of solutions and provide more time to phase in changes so that the public has adequate time to prepare.
According to a Kiplinger piece, the Social Security “shortfall train” is leaving the station already. This is because starting