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A Little Education Goes a Long Way

February 25, 2012
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In the 2008 book “Outliers: The Story of Success,” author Malcom Gladwell theorizes that it takes 10,000 hours of practice in order to become a master at a task. This applies to anything, whether it’s playing the piano, cooking, writing novels or even investing in the stock market. If you were to actively embark on this “10,000-Hour Rule,” you would need to carve out four hours of practice time, every day, for slightly less than seven years. That’s four hours each and every day, without breaks, for three-quarters of a decade. Want to become an expert at the stock...

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Five Reasons to Be Bullish Today

February 20, 2012
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Today’s lead article is short and sweet. You should be bullish today because the market has gone up for nearly three months, because breadth has improved and there are none of the typical signs of weakness that precede important downturns. You should be bullish today because the worst of the European crisis has passed, and thus money is slowly coming out of safe havens (like negative-yielding German bonds) and flowing toward more growth-oriented investments. You should be bullish today because the demand for new sources of energy and for more efficient consumption of energy is being answered–and will continue to be answered–by...

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Don’t Overthink Investing

February 17, 2012
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There are well more than 10,000 investment vehicles in the marketplace today. These include individual stocks, U.S. treasury bonds, mutual funds, exchange-traded funds, options puts/calls, forex trades and so many more it’s enough to make you not want to invest at all. In psychology, this falls under the concept of “choice paralysis.” This is the idea that when people are given a wide variety of choices, they are more likely to delay choosing out of fear of picking the “wrong” one. Whether it’s a diet pill, choosing a car, what investing choice to make or any number of other...

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Be Willing to Take Some Heat

February 16, 2012
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I wanted to focus my Wealth Advisory today on a recent email I received from a subscriber, with whom I correspond once every week or two: “Dear Michael, I have a habit of placing a protective stop just on top of my entry price once I have a small gain in a position (sometimes only 2% or 3 %; even less if I am very nervous about a situation). That way I will not lose any money if the price moves below what I paid, including commission. Of course, I can get easily stopped out, losing my position. I...

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An Unusual Vacation

February 13, 2012
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Many months ago, while casting about for a destination for a late January vacation with my wife, a respite from the usual mid-winter cold and snow of New England, I decided on Madeira and the Azores … Portuguese islands located in the Atlantic Ocean, 600 miles and 900 miles respectively from the capital city, Lisbon. We had stopped briefly in Ponta Delgada, the biggest city in the Azores, five years ago on the way to Porto, Portugal, and loved our brief glimpse of the city as well as the four days in Porto that followed, so this time the...

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