If you have been investing heavily in stocks over the last 7+ years, you have probably been getting jiggy with it. If one were to try to describe the stock market during this period, they probably would say it has been one big street party in a neighbourhood that was ravaged by the financial market meltdown in 2008. Let's build on this narrative.
This emphasis on beating the market has become entrenched especially within the financial services industry. For people managing other people’s money in products like mutual funds, pension funds and other types of managed portfolios, your investment pedigree and more importantly, your performance bonus is defined not only by if you have earned returns in excess of the market returns but also by how much, or the “alpha”. This pressure to beat the market has now trickled down to the masses. Investment products of many stripes are being cranked out with a marketing premise that their fund will outperform the market. This is insane and it has to stop.
The stock market is taking a beating. Some words of encouragement on why it's OK.
Who would have thought that a game I love to play and watch can offer so many nuggets of wisdom that can enable us to become better investors. The secret? Get the ball over the net and don't try to copy or play like the professionals!
A quick overview of the balance sheet, one of the core financial statements utilized to analyze and evaluate the financial performance of a company.