Tag Archives: index funds

Sweet Surrender – Success in any 12-Step Program requires that the addict accept their powerlessness against their addiction, and to essentially surrender to a higher power — one that can lead them on their path to success.

For active investors, this higher power is the wealth of knowledge, research and empirical evidence that is the cornerstone of prudent and successful investing. In fact, so meaningful is this research, that many of the developers of sound, peer-reviewed financial research have won Nobel Prizes for their groundbreaking findings.

If an investor hopes to invest for a brighter future, the quality of the information they use to render a decision is imperative — higher-quality information and longer-term data sets will make for sound investments that carry expected returns and a higher probability of achieving that return. The key point here is the value of long-term data — and the longer-term, the better. Unfortunately, recommendations based on short-term data are the faire du jour for 90% of the information that fills the internet, airwaves, newspapers, magazines, and of course, the ever-irritating CNBC.

Many investors may see through this veneer of news which in reality is thinly veiled advertising from high-paying sponsors to induce investors to trade–and often. However, many who are wise to this shell-game, might be surprised to find analysts reports are not much better when it comes to reliable advice from a trustworthy source.
Case in point. Toyota (once again) came under fire earlier this week when internal documents were discovered that claimed the car company saved $100 million in recalls by obtaining a limited recall from regulators in 2007. Was it this news that prompted analysts to issue an overweight rating on the stock it the spring of 2007, and giving it a price target of $151? That stock was in the low 70s last time we looked. Continue reading →