Articles

Eastern European countries have been struggling out of the darkness of communist rule into the light of free markets.

Free markets thrive when a country guarantees property rights and the rule of law. China possesses neither of these.

David Marotta discusses how politics affect us.

“The fence itself grazed through the field.”

Russia never really tried free markets. Rated at just below 50% free, Russia is considered repressed.

One area where Brazil has excelled is making headway toward energy independence.

David Marotta discusses financial planning for a college education.

To process financial information, our minds often attempt unwise shortcuts. By understanding behavioral finance, we can limit the information we use and keep our decisions balanced and on track.

The benefits of investing in the countries with the most economic freedom.

One of the early studies on herd mentality was the Solomon Asch experiments in the 1950s. The setup was a mock vision test. In reality, all but one of the participants were actors, who after a few correct answers started agreeing unanimously on a wrong choice.

Think of confidence as a continuum: Lack of confidence is paralyzing, self-confidence is good, but overconfidence is deadly. Successful investors seek to find a balance between rashness and timidity. Understanding the psychology that causes us to act overconfidently will help you avoid it.

The essence of successful financial planning is using your money to meet your life’s goals. Curiously our minds tend to fall prey to the fallacy that behavioral finance calls “mental accounting”.

Our first reaction to a complicated situation, usually instinctive, often does not serve our best interests. One heuristic that the brain uses to solve complex evaluations is to make an initial guess and then adjust from that point. This mental process is called “anchoring.”

You can both diversify for safety and boost your returns by adding international investments to your portfolio.

A year ago when the markets were all setting new highs, people were asking what they should do with their retirement portfolio. I answered, “Rebalance.” Now that the market is setting new lows, I get the same question, and my response hasn’t changed.