Market Resilience from Investing “House Money”

The market’s resilience over the past year might be due to an investor perception that they are “playing with house money,” according to a Barron’s article. The article explains that this human tendency is rooted in behavioral finance research findings showing how the human brain suffers more from loss than it feels pleasure from the same amount of gain. Nicholas Colas, co-founder of firm DataTrek, says this runs counter to much of classical economic thought. In… Read More

Dividend Paying Stocks Could be Riskier Than You Think

An article in Barron’s suggests that “dividend-paying stocks might not be as safe as they look.” Many “companies have been raising their dividends while their earnings growth has slowed or even evaporated altogether.” This is important to the overall market: in 2015 alone, the S&P 500 fell 0.7% on a price basis but rose 1.4% when dividends are included. Since 1969, the same market’s return is four times higher when dividends are included than solely… Read More

The Stock-Pickers Market Returns …

After years of stocks appearing to move in lock-step, could we finally be returning to a “stock-pickers market”? The Wall Street Journal’s Steven Russolillo says the data indicates that may be the case. “Correlation among the 10 large-cap sectors in the S&P 500 — their tendency to move in unison regardless of their underlying fundamentals — fell to 69.9% last month, the lowest level in two years, according to Nicholas Colas, chief market strategist at… Read More