expected returns

I recently ran across an interesting article by Burton Malkiel in The Journal of Economic Perspectives. In it, he examined the growth of the financial services industry since 1980. Care to guess what he learned? Well, for starters… As a fraction of the GDP, the size of the financial services […]

Read the full article >>>

Percentage Losses, Percentage Gains

by Michael on Aug 8, 2013 · 3 comments

As a followup to my post about predicting portfolio growth, I wanted to share a few more thoughts on how misleading percentages can be. When thinking about the effect of percentage gains and losses on the value of your investment portfolio, it’s important to keep in mind that they don’t […]

Read the full article >>>

When evaluating investments, you’ll often run across “average” return values. As useful as these numbers seem, they can be misleading. Why do I say this? Because they’re almost certainly arithmetic averages. Thus, they ignore the effects of volatility and overstate the returns that you can actually expect. Not sure what […]

Read the full article >>>