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Personal Finance, Investments & Markets
Actualizado: hace 2 semanas 23 horas

Now What?

Vie, 09/08/2017 - 16:40
This week I took a short tour of the Midwest to give talks to the CFA Society of Louisville and the CFA Society of Indianapolis. Both were great audiences that asked some in depth questions and provided some good feedback, as well. A number of people also asked me to share the slides from my presentation which I called ‘Now What?’. I’d say this is the question I’ve gotten more than any other from f...

The Unintended Consequences of Innovation

Vie, 09/08/2017 - 00:45
I often tell my wife it’s quite possible my three young children won’t have to drive if they don’t want to once they reach that age because of the potential that we see self-driving cars by that time. The benefits of self-driving cars could be enormous — far fewer deaths on the roads, more efficient traffic patterns, reduced stress from being glued to the steering wheel in a traffic jam, more time ...

How Stocks Took Over Asset Allocation

Mié, 09/06/2017 - 22:50
Investors spend a lot of time looking at historical data series and market relationships but very little time studying how investors allocate their capital. Investor preferences and needs can have huge ramifications on the markets. In this piece I wrote for Bloomberg I look at how investor preferences for stocks have changed over the years along with some potential implications. ******* A combination of a rising stock mar...

36 Obvious Investment Truths

Mar, 09/05/2017 - 14:45
I saw the following headline on CNBC last week: This was the first response that popped into my head, as shared on Twitter: If you're worried about protecting against 5% corrections you shouldn't be invested in stocks in the first place https://t.co/jDmpLHfxSS— Ben Carlson (@awealthofcs) August 31, 2017 This is fairly simple, and some would say obvious, advice on the markets but sometimes investors need to ...

An Alternative Solution to the Retirement Crisis

Dom, 09/03/2017 - 04:52
After writing about some of the reasons for the potential retirement crisis a few weeks ago I gave the standard prescription for the solution for most retirees — a combination of working longer, living on less, and reducing expectations for their retirement dreams. Then I received an email from a two of my retired readers, Edd and Cynthia, who took a different approach — they retired abroad. Like many others, ...

The Benefits of Being a Psychopath

Vie, 09/01/2017 - 03:28
“There was never a genius without a tincture of madness.” – Aristotle People with brain damage may make better investment decisions. That’s the conclusion of a study from 2005 by a team of researchers who looked at the gambling habits of different subjects. They studied patients who had lesions in the emotional areas of their brains and compared the results to people with no brain damage. Each participant ...

The Biggest Risk For Most Retirees

Mié, 08/30/2017 - 19:31
Risk is a tricky concept to grasp because most people don’t really understand what their true risks are. We tend to worry about things that are readily available in our memories while spending little time worrying about problems that could be years or decades out into the future. For the majority of investors, their biggest risk is not meeting their goals, or worse, running out of money. This piece I wrote for Bloom...

Decisions, Decisions

Mar, 08/29/2017 - 19:17
A couple weeks ago I wrote about how hard it is to offer investment advice without offering financial advice (or at the very least gaining a deep understanding of your client’s financial situation). The truth is there’s no perfect solution for offering financial advice or investment management. Every person, family or organization has varying degrees of investment skill and know-how. Some love learning about ...

Simple Business Models

Dom, 08/27/2017 - 20:42
I’m a big believer in the idea that simple beats complex so I’m always on the lookout for examples of this in the business world. I love the back story on Five Guys, the fast casual burger place. On the Five Guys’ website, founder Jerry Murrell says his mother always told him, “If you can give a good haircut or if you can serve a good drink at a bar or if you can serve a good hamburger, you can al...

When to Sell Your Investments

Vie, 08/25/2017 - 03:22
A reader asks: I wanted your advice about when do you recommend one sells holdings that have appreciated? I understand the concept of buying low but would appreciate your advice on when to sell. I understand reversion to the mean and have been guilty in the past of holding on too long, only to see all the gains melt away as the market corrected. This is a topic that probably doesn’t get enough time share for invest...

This Time Really Is Different

Mié, 08/23/2017 - 17:26
People in finance often say things because they make for good sound bites but don’t actually back them up with solid reasoning. Sound bites make you sound intelligent but rules of thumb always require some context. In this piece I wrote for Bloomberg I provide some context around one of the most misused phrases in all of investing. ******* Sir John Templeton wrote “16 Rules for Investment Success” in 1993. The f...

How to Get Rich with Alternative Investments

Mar, 08/22/2017 - 20:11
The size of the global asset management industry is staggering. Boston Consulting Group estimates that as of year end 2016 there was close to $70 trillion in assets under management globally (meaning money that paid a fee for the management of assets). Here’s the breakdown showing the growth in worldwide AUM since 2002: It would only make sense that a staggering amount of assets would lead to a staggering amount...

Managing Sequence of Return Risk

Lun, 08/21/2017 - 02:37
In the 30 years ended 2016, the S&P 500 returned just over 10% per year. Compounding at that rate, fifty grand invested at the start of 1987 would have grown to nearly $875,000 by the end of last year. Not bad. Besides the usual caveats — taxes, fees, behavior, diversification, etc. — the problem with these types of simulations is that they aren’t realistic. In the real world, most investors aren&#82...

A La Carte Financial Advice

Vie, 08/18/2017 - 02:56
Jason Zweig and Morgan Housel are two of my favorite writers and thinkers. They explain the complexities of business, markets and human behavior better than anyone. I’ve learned a lot from these two when it comes to writing, communicating and focusing on what matters. I don’t disagree with these guys very often but I’m going to push back a little on something they discussed in a recent conversation with ...

The Canadian Housing Market is Bananas

Jue, 08/17/2017 - 03:20
After seeing countless stories and statistics on the Canadian housing market I did some research to check things out for myself. The numbers I found are staggering. They make the U.S. housing bubble that led up to the financial crisis look like an amateur. I don’t throw around the word ‘bubble’ loosely but the Canadian housing numbers are insane. After writing this piece for Bloomberg I received by far...

Investing in Yourself (Even When It Seems Irrational)

Mar, 08/15/2017 - 16:19
A couple years ago I read an article about a new online brokerage firm that was geared towards young people called Robinhood. It sounded intriguing so I opened up an account to give it a test run. The great thing about Robinhood is that all trades are commission free. I trade infrequently but I’m always looking for ways to cut costs and it’s pretty tough to find a better deal than $0. Trades are done through a...

Your Brain on $

Lun, 08/14/2017 - 03:05
“The single greatest challenge you face as an investor is handling the truth about yourself.” – Jason Zweig In a presentation I gave a couple weeks ago I used the following slide: Your Money & Your Brain by Jason Zweig is my favorite book on human behavior so I’m constantly sourcing, re-reading and using material from the research. The book looks at neuroeconomics, which is research using bra...

The Biggest Common Investment Errors

Jue, 08/10/2017 - 22:42
It’s hard to believe but it’s now been 10 years since the first rumblings began prior to the Great Financial Crisis. My guess is we’ll be re-living many of the events that led to the worst crisis since the Great Depression in the months and years ahead. Financial stocks and some home builders saw some trouble in the summer of 2007 but one of the first warning signs that something was wrong in the markets...

Prepare Now For The End of The Bull Market

Mié, 08/09/2017 - 23:49
It’s much easier to come up with the reasons for a bear market after the fact so I like the idea of thinking these things through beforehand, even if it’s impossible to predict the future. Here’s a piece I wrote for Bloomberg laying out some possible scenarios that could derail this bull market. ******* I recently appeared on Bloomberg Television’s “What’d You Miss?” with Joe Weisenthal, Scarlet ...

10 Questions

Mar, 08/08/2017 - 22:07
10 questions I’m pondering at the moment: 1. Are investors right to worry about bonds more than stocks? The Wealth of Common Sense anecdotal sentiment reading shows that most investors are more concerned with bonds these days than stocks. Risk is in the eye of the beholder but I wonder if this worry will be a thing of the past once the next sustained bear market hits. 2. Why aren’t things worse in Japan? Sin...

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