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Emotion as an Asset Class


Investors act emotionally, not logically, toward the securities they buy or sell. This dramatically lowers their returns. But also means: smart investors will start regarding emotion as something they can base investment decisions on. In effect, they can treat widespread emotion as an asset class.

Prospect theory important explanation of investment behavior


Being aware of prospect theory can prevent individuals engaged in active investing from making poor financial choices.

Being aware of prospect theory can prevent individuals engaged in active investing from making poor financial choices.

Knowledge of anomalies important to active investing


Knowing about anomalies is important for individuals who want to utilize active investing strategies. These events violate stated financial and economic theories.

Knowing about anomalies is important for individuals who want to utilize active investing strategies.

The role of Confirmation and Hindsight Biases in active investing


Individuals who are considering the use of active investment strategies might benefit from being aware of both confirmation and hindsight bias.

Individuals who are considering the use of active investment strategies might benefit from being aware of both confirmation and hindsight bias.

Anchoring – an important concept for participants in active investing


Individuals who participate in active investing should be aware of the concept of anchoring.

Individuals who participate in active investing should be aware of the concept of anchoring.

Overconfidence key principle for those using active investing strategies


Individuals who take part in active investing can benefit from being aware of the tendency of overconfidence that is experienced by many market participants.

Individuals who take part in active investing can benefit from being aware of the tendency of overconfidence that is experienced by many market participants.

What went wrong with Modern Portfolio Theory?


Modern portfolio theory has been advocated by finance experts for decades, but it has lost some of its credibility in the recent financial crisis and subsequent bear market.

Modern portfolio theory has been advocated by finance experts for decades, but it has lost some of its credibility in the recent financial crisis and subsequent bear market.

Active investing vs. passive investing for ETFs


Active investing vs. passive investing for ETFs

Exchange-traded funds offer a number of different opportunities to investors who choose to employ active strategies rather than the passive investing approach.

Why active investing beats buy and hold


Although finance experts frequently advocate buy and hold strategies, which involve the purchase and retention of stocks over long periods of time, certain market participants have challenged this approach and instead now advocate active investing strategies.

Although finance experts frequently advocate buy and hold strategies, which involve the purchase and retention of stocks over long periods of time, certain market participants have challenged this approach and instead now advocate active investing strategies.

Why Cash Is the Best Protection


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A lot of ground gets covered in this interview with Jim Lonergan of the Connors Group, including the high degree of correlation between asset classes, and why cash is an effective tool for preserving capital in poor market conditions.

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A random walk down the wrong street


Market experts who advocate active investing strategies and their opponents have invested significant time into either supporting or refuting random walk theory.

Market experts who advocate active investing strategies and their opponents have invested significant time into either supporting or refuting random walk theory.