Kevin Kroskey's Money & Mind

With all the recent shark attacks in the news, I was reminded of an article published on Bloomberg relating investment risk to the frequency of large predator kills. They are quite a rare occurrence, but we tend to perceive them and the associated risk as being much more prevalent. This misperception also has much to do with risks when it comes to investing. With shark attacks, Greece, Puerto Rico, etc. in the headlines take a few minutes and read the article linked below. Remember what risk truly and is not and focus on what you can control. http://www.bloombergview.com/articles/2014-05-21/what-kills-you-and-your-investments

Yet another study showing how poorly prognosticators do. There's too much noise in the markets in the short run to have any forecasting methodology with reliable predictive ability. And if there were such a methodology, why would anyone share it rather than make huge profits for themselves?   - Kevin Kroskey, CFP, MBA   Gurus Achieve An Astounding 47.4% Accuracy ( From Forbes.com )   "After tracking 68 experts and 6,582 market forecasts, CXO Advisory Group has concluded that the average market prediction offered by experts has been below 50% accuracy.   The results are in and they are bad. After tracking 68 experts and 6,582 market forecasts, CXO Advisory Group has concluded that the average market prediction offered by experts has been below 50% accuracy. Flip a coin and your odds for predicting the market are better. It’s hard to imagine that the average market expert isn’t able to at least match the track record of a coin flip, but it’s true...

Below is a brief article from Weston Wellington of Dimensional Fund Advisors, reviewing the markets over the last year and concurrent headlines from the media. It always helps to keep things in perspective and not get caught up in the financial pornography that is put upon us. -Kevin Kroskey --------- For the twelve-month period ending May 31, 2011, equity investors around the world enjoyed the equivalent of blue skies and bright sunshine while the economic news was partly cloudy at best. Among forty-five developed and emerging-country stock markets tracked by MSCI, all but four had double-digit total returns (in US dollar terms), and twenty-six had returns of 30% or more. If someone had told us a year ago that global markets would stage such a broad-based rally, we would have been inclined to think that trends in employment, housing, and financial distress were about to take a pronounced turn for the better. It seems hard to argue they have done anything of the sort. ...

With spring finally here, I have a bit of a spring in my step. With a bit of a light-hearted, spring-time flair, I thought I'd share a clip from Alonzo Bodden. Alonzo has a comedy special airing on Showtime. The clip below talks about the 'Fear of Disease.' In today's world, there's always a crisis going on somewhere--financial crises included. At the potential cost of our peace of mind, they are usually showing up in our newspapers, television news, and other media outlets. Remember to keep things in perspective and don't get too caught up in the crises du jour. Think positively. Think Spring. Laugh a little. To Your Prosperity, Kevin Kroskey, CFP, MBA

Small cap stocks outperformed large cap stocks by a significant margin in most global markets last year but capturing the size premium required both patience and a willingness to ignore the advice from those claiming to identify the best-performing asset classes in advance. US small stocks got off to a strong start last year as the Russell 2000 Index jumped to a gain of 18.6% through April 23, more than double the return of the S&P 500®. But as stock prices wilted during the summer, small caps fell even faster and by August 24th both large cap and small cap indices were down roughly 5% for the year. A surprisingly strong rally during the remainder of the year drove the Russell 2000 up 31.5%, and for the year as a whole it was the best performance for US small stocks since 2003. The strength in small cap stocks caught a number of financial pundits flat-footed. An article appearing in the Wall Street Journal in mid-November 2009 claimed “small caps aren’t looking that cheap anymor...

I was recently interviewed for an article done by Betty-Lin Fisher, Business Writer with the Akron Beacon Journal, about whether bi-weekly payment plans and mortgage prepayments in general are a good thing. She wrote: Claytor and Kevin Kroskey, a certified financial planner and owner of True Wealth Design in Fairlawn, both agreed with McBride that paying off other high debt and funding other accounts should come before prepaying a mortgage. Another option is to do a little more each month. Claytor and Kroskey said they both round up their mortgage payments to add a little extra to their principal. ''By and large, paying down the house is a good idea,'' said Kroskey. But there is a caveat, he said, where he sees people making mistakes. Often, as people are getting closer to retirement and if they haven't done a really good job of saving, they might think, ''I have to pay off this mortgage before I get into retirement. It's what Americans are supp...

Investors are often confronted with unexpected developments, and the last decade offers an abundance of examples. Ten years ago, for example, Brazil was on the verge of a currency collapse, and General Electric was among the largest and most admired firms on the planet. Who would have thought that Brazilian stocks would soar sevenfold during the subsequent ten-year period, while GE shares fell 70%? A lucky few may be able to exploit such extreme outcomes to enhance their investment results. But history offers compelling evidence that shows that those making concentrated bets on companies or countries are more likely to get blind-sided by unpredictable events. Markets have 101 ways to teach us the virtues of diversification. While sifting through our stacks of news clippings in preparation for our customary review of the year's events, we came across a number of tidbits from the more distant past that offer some lessons. These quotes turned out to be oopses by those who spoke o...