The Prosperity Blog

Three Monkeys and a Cat: the Truth about Picking Stocks

Monkeys with stray kitten“A blindfolded monkey throwing darts at a newspaper’s financial pages could select a portfolio that would do just as well as one carefully selected by experts.”
-Burton Malkiel, Asset manager and author of A Random Walk Down Wall Street.

Who knew that Economist Burton Malkiel’s comment would be so prophetic!? Malkiel hypothesized that share prices move completely at random, making stock markets entirely unpredictable. While his statement about blindfolded monkeys and dartboards was a reference to the randomized nature of stocks and not a prescription for stock market success, it was only a matter of time before it was put to the test.

In 1988, the Wall Street Journal ran the first of many Dartboard stock picking contests. WSJ staffers acting as the monkeys, throwing darts at a stock table, while investment experts picked their own stocks. After six months, they compared the results of the two methods, along with stock picks from some of its readers.

The results? In the initial contest, the experts edged out the darts. However, as further “experiments” continued, the experts fared less well against darts thrown by people and, eventually, monkeys.

Money Managers or “Monkey” Managers?

In January 1999, a chimpanzee actress named Raven (the star of Babe, Pig in the City) threw 10 darts at a dartboard of 133 internet related companies. Within six trading days one of her picks was up a whopping 95%! By the year’s end, according to George Fisher, author of The Streetsmart Guide to Overlooked Stocks, Raven’s portfolio of ten randomly-selected stocks had outperformed more than 6,000 internet and technology money managers earning an astonishing 213% return.

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Disrupting Money: The Rise of Bitcoin and Cryptocurrencies

bitcoin-blog-image

Disruptive technology has come to the financial world. Bitcoin and other digital currencies are reshaping how we think about money. As Peter Diamandis observes, cryptocurrencies are making money “more digitized, dematerialized, and democratized than ever before.”

Bitcoin also provides a way for people to remove “money” from the hands of the bankers. Why should banks, Wall Street, and the Federal Reserve have so much economic and financial control, anyway?

In this article, we’ll explore disruptive technologies and how they impact industries and cultures. We’ll offer some observations and share some more from Peter Diamandis, too. And finally, we have a fascinating “life insurance” connection. (Do you know which life insurance company is buying Bitcoin?)

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Live Long and Prosper: 5 Ways to Never Run Out of Money!

A 2019 survey by AIG Life & Retirement revealed a surprising 53 percent of respondents had living to 100 as a goal. Today, more Americans than ever are reaching this goal. According to Wikipedia, there are nearly 1400 centenarians in the US alone—a number that has more than doubled in less than a decade. With continued medical breakthroughs, we expect this number to keep growing!

This may be good news for some, but for others, longevity presents financial challenges. According to Forbes.com, running out of money in the future is the #1 financial fear for Americans. As a matter of fact, most people are more afraid of running out of money than they are of dying!

Fortunately, it doesn’t have to be that way. With some proactive thinking and the right strategies, you can have confidence your money will last as long as you do. In this article, we’ll give you five strategies for greater cash flow and confidence as you age.

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Convertible Term Insurance: The Third Option

“The third option is that other possibility…”
– Lynn Barrette, Counselor and inspirational blogger

Life Insurance: It’s Not An Either/Or Decision

“Whole Life or Term Insurance?” It’s a never-ending debate amongst financial advisors and self-proclaimed experts. Today, we’d like to suggest a third option.

But first… let’s summarize the two most popular and obvious choices:

Term life insurance is life insurance purchased for a limited time, such as 15 or 20 years. Term insurance is affordable, providing the insured with more coverage for less premium. Thus it puts a greater protection in place, in the form of a death benefit. However, term life insurance policies rarely provide that benefit, because of the limited time frame of the coverage. They are less expensive because they almost always expire (like product warranties) before they’re likely to be used.

Like most other insurances, term life is an “if” insurance, not a “when” insurance. A benefit is paid only IF your house burns down, IF your car is vandalized, or IF someone passes away long before expected.

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Buying a New Car? What to Consider in 2021

“I’ve always been asked, ‘What is my favorite car?’ and I’ve always said ‘The next one.’ ”

Carroll Shelby, American automotive designer and racecar driver

Are you considering buying a new car—or perhaps a used car this year? If so, you’re not alone. And there are some things to be aware of in the current environment that can help you make the best choice!

In this article, we’ll consider:

  • The trends that may impact your vehicle’s future value
  • How to buy a vehicle in the most financially-savvy way
  • What to know before you negotiate
  • Helpful resources to assist you.

One of my mentors, Peter Diamandis, predicts that self-driving cars will make car ownership a thing of the past for urban dwellers within a few years. Already, we’ve seen taxis, Uber, Lyft, and public transit replace car ownership for many in cities such as New York and San Fransisco. The transportation-as-a-service trend continues, but it hit a hitch in 2020.

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