As investors we discover every day "shoeshine boy" indicators. In this article we will talk about the real story of Joe Kennedy, JFK's father during the Wall street crash of 1929 and the decisions he took after a discussion with his shoeshine boy. Through other concrete examples you'll discover how this human "indicator" can be a behavioral sign of a future market crash. 1. JFK's father and the shoeshine boy : The story took place in 1929 : Joseph Patrick "Joe" Kennedy, Sr.
This week one of my clients reminds me that one of the most important prerogative for a wealth manager is to inform them continioulsy and listen to their fears ! In a moment of panic, forgetting the strategy and that invest in stocks requires time ....that an investor asked me to sell the worst performing securities from its portoflio. Who has never had the idea to sell the worst perfoming stock of his portfolio or rather the opposite to buy or hold those that achieved go
Through my experience, I noticed that most of the time during the first meeting with an individual investor the main question is : "what will be my return on investment ?" Like I showed it in the previous investment tips, the return on your investment will depend on different factors like the period of investment (time), the asset allocation, your investment risk tolerance etc. In the following chart, regularly update by IbbotsonAssociates (with Morningstar) you'll see how
As introduction I' like to start with a linguistic paraphrase inspired from the Petit Prince wrote by Antoine de St Exupery that he could ask to his portolio manager : "Please draw me the best risk/return portoflio" Which is the best way to introduce you to the concept of the risk/return efficiency for portfoflio management. 1) Origin of the risk/return efficiency curve : In 1952, Harry Markowitz published a formal portfolio selection model in The Journal of Finance. He con