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Broken Pie Chart


Oct 27, 2019

Recently I found several different research pieces showing how at the very lows of the Great Recession in 2009 the percentage of funds in money market funds was at its highest. In 2009 the fund flows to bonds were greater than the previous 5 years combined. So why with equities so cheap did people stay in cash or bonds? Wouldn’t they want stocks when they were cheaper? This highlights how investors who panic an make rash decisions can do so at the very worst times. 

 

 

Why do investors panic?

How does fear guide investor decisions?

Percentage of funds in money markets spiked at time of March of 2009 lows

Why investors didn’t rebalance out of bonds and into stocks during the great recession

2009 fund flows were a record year for bonds

How using Buffered or Hedged Equity Strategies can help reduce fear and irrational choices

Benefits of staying invested while hedged

Why now is a good time to be hedged

 

 

Mentioned  in  this  Episode:

 

 

Contact Derek www.razorwealth.com

 

Morningstar Bond Fund Flows 2009 Chart https://morningstardirect.morningstar.com/clientcomm/2009.pdf

 

Dalbar Quantitative Analysis on Investor Behavior Report https://www.qidllc.com/wp-content/uploads/2016/02/2016-Dalbar-QAIB-Report.pdf

 

Podcast talking about markets within 3% of all-time highs 36% of time https://podcasts.apple.com/us/podcast/fear-investing-surprising-data-points-to-markets-near/id1432836154?i=1000443860686

 

Why diversification fails https://podcasts.apple.com/us/podcast/ep012-does-diversification-alone-reduce-systematic/id1432836154?i=1000423615813

 

Buffered Equity Strategies https://podcasts.apple.com/us/podcast/adding-downside-buffers-to-investment-portfolios-using/id1432836154?i=1000419699076

 

Why investors need a hedged equity strategy https://podcasts.apple.com/us/podcast/why-investors-need-a-protective-hedged-equity-strategy/id1432836154?i=1000418366567

 

Derek Moore’s book Broken Pie Chart https://www.amazon.com/Broken-Pie-Chart-Investment-Portfolio/dp/1787435547/ref=sr_1_1?keywords=broken+pie+chart&qid=1558722226&s=books&sr=1-1-catcorr