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There's no lack of coverage for investors who like to take their investment portfolio into their own hands. Carefully picking individual stocks and designing a custom, self-built portfolio gives investors a great sense of accomplishment and satisfaction. But unless you know what you're doing, your portfolio may end up doing more harm than good. Diversification is touted as the number one rule when it comes to investing and portfolio design is no exception. But diversification can be harder to attain than investors sometimes think. For example, an investor might add Caterpillar to their portfolio without realizing that it does a lot of business overseas, making it subject to foreign exchange risks. Many investors are beginning to doubt the traditional buy-and-hold model of stock selection in favor of simply buying an index investment and riding up the volatility. In the past 90 years, the S&P 500 has registered a return of 9.8 percent, while most investor's struggle to maintain a return of more than 8 percent. The case against stock picking is getting stronger. The dangers of great investors Many investors idolize… Read more

Unless you've been hiding under a rock, chances are you've heard of Bitcoin. It's the latest investment darling for many – a crypto-currency that can be used to verify fund transfers without the regulation of a central bank. Bitcoin started off the year as one of the hottest new investments, soaring to nearly $20,000 before falling fast to it's current price of around $8,000. If the extreme volatility makes you concerned about its effectiveness as an investment, you're not alone. Many such as JP Morgan's CEO Jamie Dimon have criticized the crypto-currency as nothing more than a scam or a bubble. As such, there are those who have decided the best policy is to simply avoid Bitcoin investments. Unfortunately, that may not be enough to fully insulate your portfolio from Bitcoin's effect. Far-reaching consequences Bitcoin's rapid popularity has ushered in new investment products geared toward helping investors gain access to the crypto-currency without having to directly own it. The added volatility of Bitcoin could translate into larger movements in your own portfolio. The creation of Bitcoin-based assets like Bitcoin futures… Read more

If you're looking for advice on portfolio strategies, you don't have to look far. There are recommendations for virtually every type of asset available, which makes it sound like your portfolio needs to look like something only a hedge fund manager could run. While portfolio design can get complicated, it doesn't have to be. There are lots of easy options you can emulate, no matter how much you have to invest. Before you put together a portfolio though, you'll need to first identify what your investment goals are, what your timeline is and how much risk you're willing to take on. For our purposes, we're going to assume you have a long time horizon and can afford to take on a little more risk. If that doesn't sound quite like you, just take our designs and modify them a little to reflect a more conservative approach. Portfolio Design 101: In this section we're going to look at three different levels of investment design, ranging from under $10,000 to more than $250,000. Designing a portfolio with $10,000 or less If you're… Read more

Every investor that's traded stocks for a while knows the feeling of watching a stock suddenly and unexpectedly drop overnight. One minute, you're looking at solid fundamentals and making a case for why the stock could move higher and, the next, you're watching investors dump shares in a panic while the stock drops to gut-wrenching levels. There's good news though – oftentimes these seemingly unexpected events can often be predicted by following up on certain tell-tale red flags. You can't just buy-hold-and-ignore your stock picks. It's important not only to pay attention to recent news and events, but be familiar with how to read financial statements. Most of the time, this is where you'll find hidden red flags that let you know a stock should be avoided. Watch for the signs There are a number of things that can come up in a stock that should immediately alert investors that something is going terribly wrong. While many can be found in financial statements, other things, like unexpected events, need to be taken into consideration. Any reports of accounting manipulation or… Read more

As an investor, there's nothing more exciting than watching an asset you own climb higher and higher. There's a sense of confidence in your decision-making and feeling of invulnerability when it defies expectations and breaks through to new highs on a near-daily basis. But, as with most things, if it seems too good to be true, it probably is. While markets and assets can break out and hit new highs due to positive economic fundamentals or catalysts, investors should think critically when an asset grows beyond its reasonable limits. It's not always easy to spot these false winners, especially when everyone around you is buying. But knowing what to look for could save you from making a big mistake in the long run. Key signs of a bubble forming There are certain characteristics of bubbles that investors can look for to avoid falling into the trap. Most investors are familiar with the tulip craze – the first known bubble that happened in the Dutch Republic back in the early 1600's. Investors were buying tulip bulbs en masse, sending valuations sky… Read more