Savvy investors know that a single mistake can wipe out months—even years—of solid returns. And beginning investors often make their share of the same four common blunders. In fact, tactics for identifying and avoiding these investing missteps are among the most important things a new investor can learn. Here they are: [...]

You don’t need a Ph.D. in economics to know that economic bubbles—and their ensuing POPS!—can take us all for a wild ride.

Bubbles occur anytime asset prices appreciate unrealistically; and they happen more often than we think. In the United States alone we have seen two in the past twenty years: The dot-com bubble in the late nineties and the mid-2000s real estate craze that has resulted in today’s downtrodden economy.

Bubbles happen everywhere. Japan, for example, experienced a huge surge in real estate and stock prices in the late 1980’s. Apartment prices doubled or even tripled in value in only a few years. By 1990, the value of Japan’s real estate had grown to five times the value of the entire U.S.; The Imperial Palace alone was valued as much as the entire state of California.

At the end of the boom, however, Japan’s balloon economy became distressed and fell hard, entering into a decade-long deflationary slump. This so-called lost decade is a painful reminder of what can result from such a bubble. In fact, Japan is still struggling to revive its economy today, in part due to the recent global financial crisis. [...]

To make a successful investment, you must know when to buy and when you should sell. The reality is that there are only a handful of companies worth holding onto for long periods of time—and there are very few investors who are perceptive enough to buy only those companies.

There will always be good times to sell stocks we own, and knowing when to sell is just as important as knowing when to buy. Yet we often find ourselves selling our winners too early and holding onto our losers too long.

Here are some questions to ask yourself to help decide when it’s time to sell your stocks. [...]

Just over a week ago, the Obama Administration waged war on Wall Street.

President Obama has proposed financial reform that would limit the size and activities of the largest U.S. banks by separating proprietary trading, hedge funds, and private equity operations from banking (taking deposits and making loans). Theoretically, these reforms would simultaneously reduce the size of these banks and curb risk-taking.

Assuming that the new proposal passes the Senate, how effective will Obama’s proposal be? Will it ensure financial stability and long-term economic growth for the U.S.? Not necessarily. Here’s why. [...]

This past week, the Boca Raton Resort & Club hosted the Third Annual Inside ETFs Conference, the world’s largest exchange traded fund (ETF) event with over 750 participants. CNBC even broadcasted live from the event with interviews from ETF issuers, marketers, fund managers and others involved in the ETF business.

With over 800 ETFs in the U.S. and total ETF assets recently surpassing the $1 trillion mark [WSJ sub. req'd.], the ETF industry is certainly growing fast. But where are ETFs going? Let’s take a look. [...]

Gold has been one of the hottest topics in the investing world in recent months, and with good reason. In 2009, investors received a 25 percent return on gold—the biggest absolute annual gain in three decades. Arguably, gold’s nine-year streak of positive returns is even more impressive.

If you’re considering whether to invest in gold, it’s important to understand the close relationship between the value of gold and the value of the dollar.

A Brief History of Gold and the Dollar

To understand how and why gold has had such a historical run-up, a little history lesson on the relationship between gold and the dollar is helpful.

The relationship between the dollar and gold is tied to the concept of tangible assets vs. financial assets. To put it simply, gold has real value, while the dollar is a representation of real value.

In 1944, the Bretton Woods Agreement launched the first system of convertible currencies and fixed exchange rates, requiring participating countries to maintain the value of their currency within a narrow margin against the U.S. dollar, which was fixed at a rate of $35 per gold ounce.

However, in the 1950s and 1960s, the increasing supply of U.S. dollars along with capital outflows aimed at Europe’s postwar recovery put downward pressure on the dollar.

Eventually, a series of dollar devaluations in the early 1970s ended the Bretton Woods system, allowing the dollar to be freely traded and freely sold, beginning the long drawn-out period of the falling dollar. [...]

Finding the right stock broker can be overwhelming. There is a glut of brokerage companies out there—both online and full service—and each service claims to be the best. So how, exactly, can you tell which broker is right for you?

As you approach shopping for a new broker, you need to decide which services you want and how much you are willing to pay for them. Plenty of broker ratings and customer satisfaction surveys exist, but high survey scores won’t matter if the broker you choose doesn’t meet your specific needs.

Before you dive into your stock broker search, ask yourself these questions:

• How much do you want to invest?
• What investing strategy will you use?
• What type of products will you invest in?
• How much customer support will you need?

Having these answers will be critical in evaluating potential brokers. Why ask these questions? Let’s look at each one in greater detail. [...]

Gross domestic product (GDP) figures provide a convenient snapshot of a nation’s economic health. Unfortunately, we too often draw conclusions based upon GDP numbers alone, overlooking underlying factors.

Although a positive GDP report bolsters confidence about the country’s economy, it is important to look beneath the surface to assure that such optimism is supported by reality. The following is a recent example.

Quarterly GDP numbers are always revised three times. The original estimate for third-quarter growth in the U.S. marked the economy expanding at a 3.5 percent annual pace. A month ago, economists dropped the number to 2.8 percent. And most recently, the Commerce Department revised the third quarter GDP figure to 2.2 percent.

These GDP numbers mark the biggest positive growth in a quarter since 2007. On paper, the economy seems to have finally stabilized from the free-fall of the deep recession. Looking closer, however, I’m less optimistic of a fast recovery for a two big reasons. [...]

I know what you’re thinking: How can high unemployment rates, declining stock markets, and having less cash in your wallet be good things? We like to think that in a perfect world, we would never have to endure the hardships associated with economic downturns like lost jobs, watching our 401(k) accounts dwindle, or worrying about how we’re going to keep the lights on and the refrigerator stocked.

But the truth is: recessions are part of a normal economic cycle in capitalist societies. In other words, recessions are necessary evils.

On the bright side, there are three reasons I believe recessions are actually good for the economy:

1. People’s attitudes change (for the better)
2. We see growth and innovation in underdeveloped sectors and shrinking of overcrowded, bloated sectors
3. We have the opportunity for self-evaluation

[...]