The availability bias (see appendix), described by Amos Tversky and Daniel Kahneman in 1973, explains that we tend to overvalue recent or easily remembered events, confusing their ease of recall with their actual probability. To avoid technical jargon and anglicisms, I call it the recency bias. Basically, we think that what happened recently is the…
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Sharp falls in major stock indices This is the most common way we would continue to communicate regarding the recent stock market crashes caused by the tariff war initiated by Trump. As we see in the image above, the Nasdaq 100 has fallen by nearly 20%, the S&P 500 by 15%, and the Stoxx Europe…
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Historically, financial markets have exhibited certain seasonal patterns that studies have identified as statistical anomalies. Phenomena such as the Christmas rally, the January effect and other seasonal effects have attracted the attention of investors and analysts for decades. However, the increased efficiency of markets in recent years has caused these effects to lose strength and…
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Major U.S. indices break new highs Although at inbestMe we are not obsessed with constantly monitoring the markets, as we firmly believe that investment decisions should be aligned with personal financial objectives and not with market fluctuations, on special occasions we review the situation of the main stock market indexes.
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Plan, process, product and not the other way around. Investing is one of the best ways to secure our financial future, but doing it correctly is not always easy. The key to long-term success lies in good financial planning, which involves understanding our life and financial goals, defining investment horizons, and, from there, making the…
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Let us recall the advantages of indexing Index management (or passive management), which, let’s remember, consists of investing through the main indexes (either with index funds or ETFs) has made investing somewhat easier… at least in theory.
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Stock market falls and volatility increases The first days of August 2024 have left us with a panorama of some uncertainty in the financial markets, marked by significant falls and an increase in volatility: -On August 5, the Japanese stock market suffered an exceptional fall of 12.4%. The fall in the Nikkei 225 (Japanese stock…
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This is not the first time I have thought of nature to associate it with certain investment themes. A few years ago, we did a post where we related a tree to a forest to explain compound interest. Recently, while reading Morgan Housel, whom I have been following for years and whose book I have…
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Investing involves risk. Risk is an inherent fact of investing. Your willingness to take risks as an investor is an important part of why you can earn returns that exceed what you would earn by keeping the money in cash-this is known as the equity risk premium. For some, the idea of risk associated with…
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As we already mentioned when we presented the new Savings Portfolio, it has a known yield (annualized return) with a very high degree of confidence, the one we publish at all times, but it is a variable yield depending on the official interest rates in the Euro zone and the official rates of the FED…
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