Tag Archives: Stocks

Q&A: Market Turmoil?

Question: Is the market turmoil a sign that markets are not efficient? Answer: The market turmoil is caused by some combination of (i) quickly fluctuating changes in expected cashflows (future profitability), and (ii) variation in investor risk aversion that leads to variation in expected returns (the discount rates for expected cashflows). Both responses can be […]

Quote of the Day

On losses associated with Yale’s endowment over the past year: “I don’t think it makes sense for an institutional investor with as long an investment horizon as Yale’s to structure a portfolio to perform well in a period of financial crisis. That would require moving away from equity-oriented investments that have served institutions with long […]

‘Sudden Wealthflow’ Syndrome?

One morning, John, a 52-year-old software designer, wakes up and realises he no longer has to go to work. For several years, he has toiled 70 hour weeks at his London based start-up company. Now his company has gone public and John is worth over £10m. His dreams have come true, yet, after an initial […]

Wealth Check: ‘I want to retire at 40. Am I deluded?’

Case Study Taken from The Independent, Saturday 10 January 2009 Nick Eddy, 27, is originally from Victoria, Australia and has been living in London for less than a year. He is a civil engineer and has been working in construction management for the 2012 Olympic Games for the past four years. Nick doesn’t have an […]

If stock picking didn’t work in 2008, when will it work?

It seems plausible that last year’s financial meltdown was so extensive and so well-advertised that investment experts (in particular, stockbrokers and discretionary managers) would have found it relatively easy to outperform the broad market by selecting the right stocks or sectors. But a review of several widely read sources of advice suggests that, in at […]