What do market benchmarks measure?

Part 1: Exploring the truth about benchmark investing

Let’s say you just moved into an area where local sports fans follow several baseball teams — like the Cubs and White Sox in Chicago, or the Mets and Yankees in New York. Obviously, you want to cheer for a winner, so you pick your new club based on how well they did in 2016. When they suddenly begin to flounder, you discover that the team had a handful of superstars who all got hurt or were traded, and the team is now mediocre in their absence.

Now apply that to investing.

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What lessons can investors learn from surfers?

As markets ebb and flow, patience and the right tools can help you ride the waves

Jack TierneyFifty years ago, thanks to the lyrics and harmonies of a certain California surf rock band, I became entranced with the idea of catching waves, which to a Midwestern kid like me, sounded like the endless summer dream. To catch a wave, surfers paddle out to a certain point in the water and wait patiently for just the right moment to catch a ride. Some waves die out early, some are steady, and every now and then you catch a really great one that makes up for all the others. However, one thing is obvious — you have to be in the water to take advantage of the opportunities.

Catching the market’s waves

If you’ve ever seen a chart of a full market cycle, it looks very much like a wave

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From A to Z: Decoding common financial terms

Skip the alphabet soup and discover the real meaning of these investment terms

Jack Tierney

A former colleague of mine from New York City had a beautiful, multi-syllabic, Italian last name that began with “A” and ended with the “Z” sound. Since it was hard to pronounce for a lot of people, he simply told everyone to call him “A to Z.” This tactic worked, because everyone remembered him and didn’t have to worry about mispronouncing his name.

I remembered him when I was drafting this blog, thinking about all the terms and jargon that our industry uses in describing investments and investment strategies. We literally have terminology from A to Z, and while all of it is useful for the right audience, so much of it can be terribly confusing without the proper context.

So are there terms we can lose — or at least define more clearly? I believe so. Below, I’ve dipped into this alphabet soup to highlight terms that can cause confusion and offer up simpler suggestions to help get the point across.

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