Behavioral Finance

Bull Market Cycle Update: Let The Good Times Roll?

The amount of resources thrown at trying to develop rules or models to predict turns or direction is truly immense. The problem, though, is that the financial markets are more of a social science given the number and behaviour of participants. You simply can’t solve for ‘x’. And even if…

Contrarian Investing: The Pains, Gains, and Takeaways

Contrarian investing has always been a fascination of mine. From the first time I read Humphrey Neill’s classic book The Art of Contrary Thinking, I’ve been watching magazine covers, newspaper headlines (above the fold, of course) and anything else that can suggest what the masses are thinking. In case you’ve never tried…

The Sun Shines For Solar Stocks

I regularly screen for ETFs making new 13-week highs or 13-week lows. This can help to identify emerging leadership before the move has already played out. This week’s new high screen yielded three results: iShares MSCI India Index ETF (INDA), Robo Global Robotics and Automation Index ETF (ROBO) and Guggenheim…

Mind Games: 3 Behavioral Traits Investors Should Be Mindful Of

In “Bubbles and Elevators”, we discussed how human beings do seemingly ridiculous things to fulfill their instinctive need to mimic what others are doing, right or wrong, logical or illogical. The greatest investors, those that make money when markets are rising and avoid the pain when bear markets occur, are…

Investing Strategy 101: It Pays To Follow Your Process!

One of the earliest recollections from my start in the industry was an investing strategy founded by Michael O’Higgins called the ‘Dogs of the Dow’. The simplicity of buying high yield blue-chip companies lured in numerous investors and became quite the phenomenon in the early 1990’s. The premise of this investing…

Insights Into Investing Through Financial Bubbles and Elevators

Financial Bubbles and Elevators Volumes have been written on behavioral finance and the seemingly “irrational” decisions investors tend to make to avoid straying from the herd. This article examines a current example coined “FOMO” (fear of missing out), in today’s texting parlance. Through a better understanding of the psychological dynamics of…

Investor Skepticism Fuels Bearish Climate For Stocks In 2016

Investor skepticism is something that we hear about often in the stock market. More importantly, we feel it deep in our core. It is usually entwined with disbelief that a current trend can continue given a specific set of concerning factors.  Investor skepticism is also the reason that investing can…

SHORT-TERMism: Algos, ETF’s And Investor Performance

This post came over via Shane Obata and was written by Craig Basinger, Richardson GMP’s Chief Investment Officer. “The stock market is a device for transferring money from the impatient to the patient.” – Warren Buffett The only constant in the investment landscape is change. I would still classify myself…

The Importance Of Mental Flexibility In Trading

Possessing mental flexibility is essential for any trader, but it is especially important for short-term traders who constantly have to reevaluate the merits of their open positions. There is a constant barrage of data that must be interpreted and filtered intraday, and it is the job of a professional trader…