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Good article & ties-in with the WSJ ("Euphoria") article that @Tony cites in the Market Top thread. Martin Conrad mentions Benjamin Graham frequently here, but I found it a bit hard separating out Conrad's own recommendations (or biases) from what Graham taught. That's not to say he distorts Graham. But I have a sense Conrad makes a lot of observations/inferences that go well beyond Graham's teachings.
To learn more, I located an older Martin Conrad article (Barron's December 31, 2011) in which Conrad appears to take a very cautious approach to investing, and also puts an awful lot of weight on investor psychology. I already knew the "average" investor underperforms badly. But I didn't think it was this bad : "In the 20 years ended 2008, a period that included the best decade of performance ever for stocks, the average stock-fund investor averaged only a 1.9% annual return (due to consistently poor buy and sell decisions) even though the average stock mutual fund returned 8.4% annually over the same period." http://www.barrons.com/articles/SB50001424052748703522304577086891063798090
Wondering about Conrad's (Graham inspired) recommendation that investors use low cost balanced or allocation funds for their core holding, I dug up an article which attempts to define specific fund recommendations Graham made (or would make today). Not very definitive - but may be of interest. http://www.gurufocus.com/news/164674/are-there-any-good-ben-grahamstyle-mutual-funds
Note - Was able to access the article @Ted linked the first time. When I went back later to read it again, the article wouldn't come up. Clearing your cache might work if you are having a similar issue.)
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Derf
To learn more, I located an older Martin Conrad article (Barron's December 31, 2011) in which Conrad appears to take a very cautious approach to investing, and also puts an awful lot of weight on investor psychology. I already knew the "average" investor underperforms badly. But I didn't think it was this bad :
"In the 20 years ended 2008, a period that included the best decade of performance ever for stocks, the average stock-fund investor averaged only a 1.9% annual return (due to consistently poor buy and sell decisions) even though the average stock mutual fund returned 8.4% annually over the same period."
http://www.barrons.com/articles/SB50001424052748703522304577086891063798090
Market numbers for December 31, 2011 (date of above article):
- Dow Jones Industrial Average ( DJIA ) Close 12217.56 Down 69.48
- Nasdaq Stock Market Close 2605.15 Down 8.59
- S&P 500 Close 1257.60 Down 5.42
http://daytradingstockblog.blogspot.com/2011/12/dow-jones-close-123111-stock-market.html
Wondering about Conrad's (Graham inspired) recommendation that investors use low cost balanced or allocation funds for their core holding, I dug up an article which attempts to define specific fund recommendations Graham made (or would make today). Not very definitive - but may be of interest. http://www.gurufocus.com/news/164674/are-there-any-good-ben-grahamstyle-mutual-funds
Note - Was able to access the article @Ted linked the first time. When I went back later to read it again, the article wouldn't come up. Clearing your cache might work if you are having a similar issue.)