Wednesday, November 14, 2007

Recommended Articles

This week's Carnival of Personal Finance is hosted by Million Dollar Journey, and features my article titled Active Resume Building. Here are some more recommended posts from this carnival:

The Personal Financier has a good article about common investment mistakes. I agree with most of the points Dorian makes, however one of his points "selling winning stocks too early, or holding onto losers for too long", contradicts another of his points cautioning against "Trying to time the market ". I actually agree that you should not try to time the market, and recently wrote a post on the subject, with some empirical data, but how can you practice this AND try to time individual stocks at the same time? Market timing is bad. Period.

Me vs. Debt has a post about asking for a raise, and the strategy he used for achieving his goal. I agree with every point he makes, and especially with his final point about "not mentioning his bills" as an argument. Honestly, your boss does not care about your bills. Your personal circumstances are not a factor in granting or denying your request for a raise. Your boss cares about two things: making his budget, and exceeding his departmental goals. If your raise moves him in the right direction on both - you are in good shape. If not, you probably won't be getting that raise. Here is some more advice on things to avoid when asking for a raise.

Canadian Dream wonders why there is no universal personal finance education in North America. He also gives a pretty cynical response: companies make money off of people's ignorance (he actually uses the word stupidity, but I am more diplomatic). I am not sure whether he actually believes in this explanation, but I have a simpler one: who should care about this issue? Is there a pressure group or lobby to push for more financial education? The people that need financial education, mostly don't realize that they need it. The ones that could provide it, mostly have no financial incentives to do so. And, finally, government only acts to serve the interests of various pressure groups - there are no campaign bribes (sorry, I meant to say "contributions") to be won by working on this issue. So there. Now who is the cynical one?

Finally, Money Walks offers a useful tutorial for those who are not sure about how to calculate their net worth. It also features some stunning art work, which may or may not have been stolen from the Museum of Modern Art.

2 comments:

Me said...
This comment has been removed by the author.
Dorian Wales said...

Hi,

I appreciate your mention of my article on investing mistakes to avoid. I agree timing the market is bad, period. However, I see no contradiction between not timing the market and not selling winning stocks/selling losing stocks. There is a clear tendency among investors to sell winning stocks too soon and hold on to losing ones forever. This is a common mistake which investors should be aware of. I agree they should not try and time the selling of the stock but they should be aware of the psychological tendencies associated with losing or winning.

Regards,

Dorian