Personality Zone

  “Socially responsible investing” and “corporate social responsibility” have been buzz words in the past decade in the US and Europe.  According to the Report on Socially Responsible Investing Trends in the United Stated published by the Social Investment Forum (SIF), assets being managed in strategies consistent with social responsible investing have reached $2.71 trillion in 2007 and have increased by more than 18 percent between 2005 and 2007.  T…

Since Muhammad Yunus and Grameen Bank received the Nobel Peace Prize in 2006 for their efforts to provide loans to the poor, microcredit has been brought to the fore front of international attention.  Microcredit is the provision of very small loans (and hence the name ‘microloans’) to those who are barred from the formal banking sector.  Microcredit targets those who lack collateral, do not have a credit history, and hence do not meet minimal qualifications for applyi…

What is the common thread running in the lives of the following successful and outstanding African American men? Clarence Thomas (Supreme Court Justice), Theodore V. Wellls Jr. (who represented Dick Cheney’s former chief of staff and was voted 2006 Lawyer of the Year by the National Law Journal), Edward P. Jones (Pulitzer Prize-winning author), Stanley E. Grayson (an investment banker and former New York City Deputy Mayor), and Eddie J. …

There are close ties between money, economy, and presidential election.  The economy is one of the main concerns and the most important issue in this year’s election.  Both economists and political scientists have shown that historically a suffering economy usually means bad news for the candidate representing the incumbent party.  In fact, the model built by Yale Professor Ray Fair predicts that even with an economic growth of 1.8% for the first three quarters of 2008,…

With a lot of uncertainty in the market, it is natural to seek for security.  Many investors are purchasing gold instead of holding on to paper currency in fear of inflation.  Similarly for a long time, people who are averse to risk like to invest in real estate which often gives a sense of security.  Conservative investors are drawn to blue chip stocks for similar sense of stability.  However when we worry about our basic needs such as housing, health care, education, a…

The past few weeks have been a roller-coaster ride in the stock markets globally.  European and Asian markets have reacted adversely to news of economic slowdown in the US.  For many investors here and overseas, we saw the markets drop by amounts similar to the period following 9/11.  That’s alarming.  In addition, January 21 was called by Dr. Cliff Arnall as “Blue Monday”—the most depressing day of the year due to the confluence of factors such a…

Economists have traditionally conceptualized investment decisions as rational and forward-looking.  For example, the amount of money that the person decides to invest and save depends on his or her trajectory of lifetime earnings.  However the past decade or so, both economics and finance have explored the intersection of those disciplines with psychology to link emotions such as impatience, regrets and guilt to phenomena such as over-spending and inadequate savings.  If a pe…

One strategy employed by many savvy investors is that of contrarianism.  That is, look at what the herd is doing, and do the opposite.  The rationale behind this is that once "everyone" is following a particular trend, the amount of value to be realized in the particular area has already been priced in to the investment, so any spectacular or even very good gains have already been realized.  Of course, those who buy in at the start of a trend and sell before the end …