Dave Gardner’s Money Talks: Hot investments for 2011?
Dave Gardner does a great job of pointing out the folly of trying to follow “hot” tips in the following article. The best investment strategy is one that has you invested in low-cost, passively-managed funds (like the funds from DFA).
Steve
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Dave Gardner’s Money Talks: Hot investments for 2011?
At the end of the year, the financial press is filled with financial retrospectives and prognostications. Pick up your favorite monthly financial magazine and you’re treated to articles that tell you the best stocks and mutual funds to own for 2011.
That a calendar event has any bearing on why it may be time to load up on a given stock seems nonsensical. If the financial analyst or journalist comes across a good idea in September, it’s hard to understand why we should wait until the end of the year.
My recommendation is that when you discover a headline trumpeting the top funds for the new year, you promptly recycle it and get on with some activity that is more profitable or at least more enjoyable. Whenever advice is rendered, whether from a financial planner, an insurance agent or via an article in the financial press, it’s wise to consider the motivation of the source of information.