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  Timeline Photos"Brillance in the stock market"
“In a bull market, there’s a tendency for investors to think they’re brilliant,” says Brad Barber, a finance professor at the University of California, Davis, and an expert in behavioral finance. Indeed, as share prices climb, investors’ confidence grows and they start making all kinds of dubious claims.
Here are seven comments you have probably heard from friends—and that may have escaped your own lips.
1. “I’ve beaten the market.”
Investors often compare their global stock portfolio to the S&P 500, an index of U.S. large-company stocks. That’s an easy comparison in a year like 2015, when stocks in foreign countries and shares of smaller U.S. firms are outpacing the S&P 500.
The better performance of foreign and small stocks can boost a portfolio’s return, so it beats the S&P 500—even if the portfolio isn’t beating an index that tracks the global stock market.
If the S&P 500 doesn’t provide a favorable comparison, investors will often change indexes or ignore one-year results and instead focus on three-year or five-year returns.
Or they might not use an index at all—and instead compare their results to the mediocre actively managed mutual funds their brother-in-law bought.
2. “My stock picks have made so much money.”
Share prices have tripled since 2009, so anybody who owned stocks over the past six years should have notched healthy gains. “But we ascribe the gains to our own skill,” says Mr. Barber.

This has an upside: Self-confident individuals are often happier. Problem is, they also tend to trade too much and make big, undiversified investment bets.
That tendency can get worse as stocks climb higher, according to Mr. Barber. Investors not only grow more cocky as their portfolios grow fatter, but also they feel as if they’re ahead of the game. Like casino gamblers who are lucky early in the evening, “you get this ‘house money’ effect,” he explains. “You’re willing to take on more risk, because you feel like you’re playing with gains.”
3. “It’s the Fed’s fault.”
What happens when our investments don’t pan out? Instead of blaming ourselves, we blame others.
“When our bond portfolios have done well in recent years, it’s because we made good decisions,” says John Nofsinger, author of “The Psychology of Investing” and a finance professor at the University of Alaska Anchorage. “But when it comes to the bond market’s recent bad performance, we blame the Fed.”
Bonds have struggled over the past month, as the yield on the benchmark 10-year Treasury note has climbed from below 1.9% to above 2.2%, driving down bond prices.
Alternatively, we might simply rewrite history. “We misremember to make ourselves feel better,” Mr. Nofsinger says. “We just ignore the fact that our 401(k) didn’t do that well last year.”
4. “My portfolio has grown so much.”
That may be true. But how much of the growth has come from the savings we have added, rather than from investment gains?

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EMOTION MOVING MARKETS NOW: 44/100 FEAR PREVIOUS CLOSE: 60/100 GREED ONE WEEK AGO: 66/100 GREED ONE MONTH AGO: 66/100 GREED ONE YEAR AGO: 37/100 FEAR Put and Call Options: FEAR During the last five trading days, volume in put options has lagged volume in call options by 37.01% as investors make bullish bets in their portfolios. However, this is still among the highest levels of put buying seen during the last two years, indicating fear on the part of investors. Market Volatility: NEUTRAL The CBOE Volatility Index (VIX) is at 14.06. This is a neutral reading and indicates that market risks appear low. Stock Price Strength: EXTREME FEAR The number of stocks hitting 52-week highs exceeds the number hitting lows but is at the lower end of its range, indicating extreme fear.

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"Brillance in the stock market" “In a bull market, there’s a tendency for investors to think they’re brilliant,” says Brad Barber, a finance professor at the University of California, Davis, and an expert in behavioral finance. Indeed, as share prices climb, investors’ confidence grows and they start making all kinds of dubious claims. Here are seven comments you have probably heard from friends—and that may have escaped your own lips. 1. “I’ve beaten the market.” Investors often compare their global stock portfolio to the S&P 500, an index of U.S. large-company stocks. That’s an easy comparison in a year like 2015, when stocks in foreign countries and shares of smaller U.S. firms are outpacing the S&P 500. The better performance of foreign and small stocks can boost a portfolio’s return, so it beats the S&P 500—even if the portfolio isn’t beating an index that tracks the global stock market. If the S&P 500 doesn’t provide a favorable comparison, investors will often change indexes or ignore one-year results and instead focus on three-year or five-year returns. Or they might not use an index at all—and instead compare their results to the mediocre actively managed mutual funds their brother-in-law bought. 2. “My stock picks have made so much money.” Share prices have tripled since 2009, so anybody who owned stocks over the past six years should have notched healthy gains. “But we ascribe the gains to our own skill,” says Mr. Barber. This has an upside: Self-confident individuals are often happier. Problem is, they also tend to trade too much and make big, undiversified investment bets. That tendency can get worse as stocks climb higher, according to Mr. Barber. Investors not only grow more cocky as their portfolios grow fatter, but also they feel as if they’re ahead of the game. Like casino gamblers who are lucky early in the evening, “you get this ‘house money’ effect,” he explains. “You’re willing to take on more risk, because you feel like you’re playing with gains.” 3. “It’s the Fed’s fault.” What happens when our investments don’t pan out? Instead of blaming ourselves, we blame others. “When our bond portfolios have done well in recent years, it’s because we made good decisions,” says John Nofsinger, author of “The Psychology of Investing” and a finance professor at the University of Alaska Anchorage. “But when it comes to the bond market’s recent bad performance, we blame the Fed.” Bonds have struggled over the past month, as the yield on the benchmark 10-year Treasury note has climbed from below 1.9% to above 2.2%, driving down bond prices. Alternatively, we might simply rewrite history. “We misremember to make ourselves feel better,” Mr. Nofsinger says. “We just ignore the fact that our 401(k) didn’t do that well last year.” 4. “My portfolio has grown so much.” That may be true. But how much of the growth has come from the savings we have added, rather than from investment gains? If we’re disappointed by our investment performance, “we can change from measuring investment return to investment level,” Mr. Nofsinger says. “If my return is negative but contributions allowed the level to still increase, I can focus on the level.” 5. “It’s only a paper loss.” If we buy a $10 stock that falls to $8, we have lost money. But many investors don’t see it that way. “People feel that paper losses are different from real losses,” notes Meir Statman, a finance professor at California’s Santa Clara University and author of “What Investors Really Want.” The reason: There’s still a chance that the shares will bounce back. What happens when we finally sell that losing stock? We quietly drop it from our mental arithmetic—and now we can boast to our neighbors that we’ve made money on every stock we own. 6. “I bought it for diversification.” When an investment doesn’t perform the way we expect, we will often mentally reclassify it. Take gold, which was all the rage after its price jumped more than sevenfold over the decade through 2011. But instead of continuing to soar, gold has lost more than a third of its value since September 2011. What to do? We might drop it from the “it will make me rich” portion of our portfolio—and reclassify it as “it might do well if we get another financial crisis.” 7.“This time, I’ll get out before the crash.” In hindsight, market tops and bottoms seem obvious, so we figure we’ll see the next one coming. But the current bull market’s peak will probably be just as murky as the low point of the last bear market, in March 2009. “We can now see that that was the bottom of the market,” Mr. Statman says. “But at the time, you couldn’t see the pattern.”

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US Stock market update in French. Les actions américaines ont été légèrement en baisse vendredi, mais outre des bas intraday, après la Réserve fédérale présidente Janet Yellen a réitéré l'intention de la banque centrale à relever ses taux d'intérêt à court terme cette année. De nombreux investisseurs attendent la Fed à augmenter les taux en Septembre, mais il ya peu de consensus quant à savoir si les coûts d'emprunt peu élevés seront dérailler une course de taureaux qui en est à sa septième année. Avec des taux plus élevés ainsi télégraphié, gestionnaires de fonds se tournent leur attention sur la probabilité de hausses de taux ultérieures. Dans ses remarques vendredi, Mme Yellen a également souligné les difficultés économiques tels que la croissance des salaires lente, faible inflation et croissance décevante, décourageant la vue que la Fed se lancer dans un cycle à part entière resserrement. Le Dow Jones Industrial Average a chuté de 19 points, ou 0,1%, à 18267. Le S & P 500 a diminué d'une fraction à 2130. Le Nasdaq Composite a augmenté de 4,7 points, ou 0,1%, pour 5095. "Elle n'a pas dit grand-chose qui est nouveau», a déclaré Paul Christopher, responsable de la stratégie internationale, Wells Fargo Investment Institute. Le ton, at-il dit, a suggéré qu'elle continue de croire hausses de taux cette année sont appropriés et que la décision sera données dépendantes, pas de nouvelles révélations. Comme la saison des résultats du premier trimestre tire à sa fin, les investisseurs se concentre essentiellement de retour sur le calendrier de toute augmentation des taux d'intérêt par la Réserve fédérale, les commerçants dit. Les remarques de Mme Yellen vendredi ne fournissent pas nouvelle clarté pour les investisseurs. "Le discours laisse les marchés encore barattage, à la recherche d'un événement ou d'un temps ou l'ampleur de la Fed de se déplacer", a déclaré M. Christopher. Stock-volumes commerciaux ont été mis en sourdine vendredi avant le long week-end, à l'image des dernières séances de bourse. La semaine est sur le rythme pour être le plus lent depuis la semaine y compris le jour de l'An. Le marché boursier sera fermé lundi pour Memorial Day. "Il n'y a pas beaucoup d'idées ou de catalyseurs là-bas frais dès maintenant", a déclaré Brett Mock, directeur général du cabinet de courtage JonesTrading Services institutionnels LLC. L'indice des prix la consommation a augmenté de 0,1% en Avril à partir d'un mois plus tôt, le Département du Travail a déclaré vendredi. En excluant les catégories de denrées alimentaires et de l'énergie, prix dits de base ont progressé de 0,3%, la plus forte hausse depuis janvier 2013. Les économistes interrogés par le Wall Street Journal avaient prévu l'ensemble des prix à augmenter de 0,1% et les prix de base, en augmentation 0.2%.

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Federal Reserve Chairwoman Janet Yellen said Friday the central bank is on track to raise short-term interest rates this year, but will likely proceed slowly and cautiously because the job market hasn’t fully healed, inflation is low and growth has again disappointed. The comments, made just a few weeks before the Fed’s next policy meeting June 16-17, were the latest indication from the central bank it is highly unlikely to start raising rates at that gathering but could do so later in the year if the economy picks up. “I think it will be appropriate at some point this year to take the initial step to raise the federal-funds rate target and begin the process of normalizing monetary policy,” Ms. Yellen said in the prepared text of comments to the Greater Providence Chamber of Commerce in Providence, R.I. The Fed’s benchmark short-term rate, the federal-funds rate, has been near zero since December 2008. Many investors expect the first Fed rate increase in September. The tone of Ms. Yellen’s comments was broadly somber. The job market, she argued, wasn’t back to full strength, for reasons she has cited before. Even though the unemployment rate has dropped to the relatively low level of 5.4% in April, it “probably does not fully capture the extent of slack” in the economy, she said. Many people have dropped out of the labor market, discouraged about their prospects and others are working in part-time jobs when they want full time employment. “The generally disappointing pace of wage growth also suggests that the labor market has not fully healed,” she said. “Even with the significant gains in the past couple of years, it is only now, six years after the recession ended, that the labor market is approaching full strength,” she said. “I say ‘approaching’ because in my judgment we are not there yet.” She said the Fed has made even less progress returning inflation to its 2% objective. Excluding volatile food and energy categories, inflation has been below that goal for most of the recovery, she said. Headwinds to growth have abated but haven’t disappeared she said. On her list of headwinds, she added a new factor that is getting increased attention inside the U.S. central bank: China, the world’s second largest economy, is slowing, with uncertain effects on the rest of the world. “Initially the euro-area crisis was the biggest headwind coming from the rest of the world,” Ms. Yellen said. Now, she noted, “growth in many other parts of the global economy, including China and some other emerging market economies, has slowed. Weak growth abroad, together with its accompanying implications for exchange rates, has dented U.S. exports and weighed on our economy.” The Fed is expecting growth to pick up in the months ahead.

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Apple reported earnings after the market close on Monday. Apple was expected to report second-quarter revenue and earnings above Wall Street targets. The company fielded questions about demand and shipments regarding the just-launched Apple Watch during its conference call and provided an update to its capital allocation plan

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The Federal Reserve Open Market Committee meeting kicks off on Tuesday, but the interest-rate statement isn’t released until Wednesday afternoon at 2 p.m. Eastern Time. Investors will be looking for clues as to whether a rate hike in June is still in play, although a large majority of Fed watchers don’t think the central bank will provide any hints, preferring to keep all options on the table. For the discussion on Wednesday, the FOMC will have the first-quarter GDP number to include in their assessment of the economy and interest rates. Tuesday’s data: Consumer confidence, due at 10 a.m. Eastern Time, is expected to climb to 102.5 in April, after surging to 101.3 in March.

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