FINANCIAL HOUSEKEEPING | Consider the finances of life’s major events
Life transitions are big events in many ways, not the least of which are the financial challenges and changes that occur.
The Financial Planning Association and the National Endowment for Financial Education have teamed up to create an interesting, interactive resource, plotting life events and offering resources to help cover the financial decisions that accompany each change.
The tool – available free at www.fpanet.org/public/tools/lifeevents/ – covers everything from work to medical issues, from jobs to estate planning, emergencies and much more. The data behind the links is comprehensive and helpful, especially for someone who is only starting to consider the broader impacts of life-changing decisions.
SHORT COURSE | Mined data
A controversial – but also popular – method of developing stock market and investment theories, “mining the data” requires a researcher to pore over reams of statistics and results looking to find patterns that suggest a theory.
Many investment themes and trends are now identified this way.
While data mining is understandably popular, given the power of computers, its theories can have serious flaws, most notably that it finds facts first and then seeks to read something into those facts. Logically, it is better to come up with an idea and then see if the market bears it out.
Many researchers try to explain away stock market anomalies using data that has been mined, coming up with theories that certain times – the end of the week or the end of the month, for example – are better to trade shares. Investors examining these theories should consider whether researchers are reading too much into numbers that could be random.
