Churning and Investment Turnover

Oct 8, 2020 2:52:28 PM / by InvestorKeep

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churn

 

Churning milk or cream in a machine can produce butter. Churning financial accounts produces increased commissions for financial professionals who do not have their customer’s best interests in mind. Excessive trading in accounts can increase trading commissions. This unethical behavior can cost significant money (and returns) in fees, taxes, and performance losses. Financial professionals should be trading with their customers’ goals in mind, not their own commissions.  

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Worsification by Diversification

Oct 1, 2020 9:47:49 AM / by InvestorKeep

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“You need to diversify your investment portfolio.” You have probably heard it a hundred times. The idea being your investments are mixed enough that they do not all lose value simultaneously (in the case of a downturn). Unfortunately, going to extremes diversifying your portfolio can actually make investment performance worse. This is called “worsification by diversification.” One example of this phenomenon is spreading accounts across multiple financial institutions. While it seems you are diversifying (dispersing finances out), it is actually a detriment. Consolidation of accounts allows for two huge benefits:

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Life Use Accounts

Sep 24, 2020 3:49:38 PM / by InvestorKeep

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The Impact of Investment Rating

Sep 17, 2020 9:22:07 AM / by InvestorKeep

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Fund Fees and Returns

Sep 10, 2020 11:05:21 AM / by InvestorKeep

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Rebalancing Your Portfolio

Sep 3, 2020 9:39:00 AM / by InvestorKeep

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rebalancing

 

Your investment portfolio is not static. While “over” trading can lead to higher fees and lower returns, leaving everything in place for too long can leave you with more (or less) risk than you’d like and an improper alignment of your investments to your goals.

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Stock Splits

Aug 27, 2020 11:37:26 AM / by InvestorKeep

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Life Use Accounts: Savings

Aug 20, 2020 9:15:06 AM / by InvestorKeep

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savings

 

As a reminder, life use accounts are precisely that, accounts and/or assets we use for daily living. Your checking account is not a way to save money or invest. It is simply a container to hold your money as it flows in and out. Savings accounts are also considered life use accounts. They are not typically viewed as long term (more than 12 month) investment type accounts.

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Market Increase / Decrease

Aug 12, 2020 3:05:01 PM / by Michael Dailey

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The waterfall: A simple way to manage finances

Jul 30, 2020 8:55:53 AM / by Michael Dailey

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