What the experts say

Treasurys still in demand

A few months ago, experts were warning that an improving economy would send the Treasury bond market into a tailspin, said Walter Hamilton in the Los Angeles Times. “But the experts were wrong.” Fears about the European debt crisis sent increasingly conservative investors back into U.S. government securities, “producing juicy gains for investors.” Mutual funds that primarily invest in long-term Treasury bonds shot up 14.1 percent in the second quarter, “easily outperforming all other bond sectors and even besting all stock categories.” So what happens now? When interest rates eventually trend higher, government bonds will languish. But with the economy recovering more slowly than expected, the “day of reckoning” for Treasurys may not come anytime soon.

Your timing is all wrong

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Investors have long been taught the hazards of trying to time the market by buying and selling volatile stocks, said Steven Goldberg in Kiplinger’s Personal Finance. But a “groundbreaking study” by Morningstar shows more clearly than ever the high cost of such a strategy. Even when active investors did select funds that, over the past 10 years, outperformed their peers, they bought and sold at the wrong time. Thus the average investor’s actual annualized return during the past decade was 1.5 percent less than the average fund’s return. Investors who bought and sold funds with guidance from advisors didn’t do any better. Best to pay attention to overall asset allocation, not to “what your gut or some guru tells you the market will do next.”

The psychology of home sales

Home sellers looking to get an edge on the competition should pay attention to a “growing body of research” that studies the psychology of home buying, said David Rout in SmartMoney. With so many houses on the market, a buyer’s decisions may be based on subtle factors. A pink room can be a deal breaker, researchers at Old Dominion University have found—even though the problem can be rectified by a “few cans of paint.” Even more surprising, a University of Texas study found that homes whose listings emphasized renovations such as “new paint, new carpet, and/or roof work” actually fetched lower sales prices by raising buyers’ suspicions.