Dec 3, 2024
Periods of extreme leverage and speculation are not new, and the outcomes have consistently been painful for unprepared investors. The late 1990s dot-com bubble serves as a prime example. Speculative bets on internet stocks drove valuations to extraordinary levels, with investors leveraging margin accounts and options to chase gains. When the bubble burst, the Nasdaq lost nearly 80% of its value, leaving leveraged traders especially vulnerable to devastating losses. Lance and Jonathan discuss these lessons from history on today's show, plus a discussion on asset diversification, and what happens when all assets become correlated, the fallacies of diversification, and overlap risk. Money mistakes made by the young; the bset stop-loss tools and strategies; the flaw in comparing portfolio performance to the S&P Index (or any index).
SEG-1: Why Sentiment-driven Indexes are Up
SEG-2: Lessons from History - What Excessive Leverage Teaches
Us
SEG-3: The Fallacies of Diversification
SEG-4a: The Best Stop-loss Tool
SEG-4b: Comparing Portfolios to S&P Index
Hosted by RIA Advisors Chief Investment Strategist Lance
Roberts, CIO, w Senior Financial Advisor Jonathan Penn,
CFP
Produced by Brent Clanton, Executive Producer
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Watch today's show video here:
https://www.youtube.com/watch?v=s95h3jUr3c4&list=PLVT8LcWPeAugpcGzM8hHyEP11lE87RYPe&index=1&t=2s
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Articles mentioned in this report:
"Leverage And Speculation Are At Extremes"
https://realinvestmentadvice.com/resources/blog/leverage-and-speculation-are-at-extremes/
"Extreme Speculation Has Returned"
https://realinvestmentadvice.com/resources/blog/extreme-speculation-has-returned/
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The latest installment of our new feature, Before the Bell,
"Diversification Isn't What You Think" is here:
https://www.youtube.com/watch?v=rmN8a-6Yr5g&list=PLwNgo56zE4RAbkqxgdj-8GOvjZTp9_Zlz&index=1
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Our previous show is here: "Extreme Speculation Has Returned"
https://www.youtube.com/watch?v=HIfTDuPmsQs&list=PLVT8LcWPeAugpcGzM8hHyEP11lE87RYPe&index=1&t=2s
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