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James Bradfield, the Elias W. Leavenworth Professor of Economics, held a personal finance workshop outlining student loan management, building credit, investment plans, personal budgets and long-term financial decisions on Feb. 25.

Professor Bradfield began his discussion by asserting that most important observation when dealing with personal finance is that "the big secret for making money in the stock market is there is no secret." Building his discussion off of this main idea, he detailed the fluctuating history of economic growth in the United States, stating that there are unforeseen periods of "turbulence" in the economy. Given this, he advised students to buy and hold shares, rather than trade. This leads to Bradfield's second main assertion: trading is hazardous to your wealth.

According to Bradfield, trading is "an expensive pastime." However, buying and holding shares ensures mounting wealth. This is because the stability of the American political system and the strength of the capitalist system generate growth, regardless of unforeseen turbulent times. In light of this assertion, Bradfield advised students to hold diversified portfolios and equities, purchase an index fund, and invest in overseas funds. He also stated it is worthwhile to check into mutual funds, whose purpose is to offer cheap diversification through constructing and managing portfolios.

Bradfield concluded the workshop by warning students of certain fallacies, including "dollar-cost averaging" and the idea that the market can be consistently timed for good times to buy and good times to sell." He also urged students to avoid trying to identifying mispriced securities and simply "tolerate the turbulence" because even through great economic depression, the market has never failed to create growth.

-- by Danielle Raulli '10

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