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Personal Finance, Investments & Markets
Actualizado: hace 2 horas 20 mins

The Emerging Markets Performance Cycle

Mar, 11/21/2017 - 17:31
Through the end of the day Monday, emerging market stocks (as proxied by VWO) are up 28% in 2017 compared to a 17% gain in U.S. stocks (SPY). While U.S. stocks have been up for 8 years in a row, emerging markets have fallen 4 of the past 8 years. All stock markets are cyclical but EM stocks may be even more so than most. This piece I wrote for Bloomberg provides some context on this cyclicality. EM is not a place every...

Peer Pressure

Lun, 11/20/2017 - 03:04
Yale Endowment CIO David Swensen doesn’t make too many public appearances so I was excited to run across a back and forth he had with Robert Rubin this past week at the Stephen C. Freidheim Symposium on Global Economics. Swensen touched on a number of subjects investors should be interested in from expected future returns, market crashes, the current low volatility regime, asset allocation, alternative assets, and...

Animal Spirits Potpourri: Episodes 2-4

Vie, 11/17/2017 - 14:28
For our new podcast, Michael and I plan on releasing one 20-30 minute episode (lifehack: listen at 2x speed if you’re a podcast maniac like me and it’ll take you 10-15 minutes per episode) every Wednesday morning but we’ve been practicing for a few weeks (taping yourself having a conversation is not as easy as it sounds) and have a backlog of three episodes. So we’re releasing them all today so we ...

Being in Control of Your Own Time

Vie, 11/17/2017 - 02:35
The Washington Post had a fascinating profile of investor Bill Miller last week. By my count, this is the 45th comeback for Miller (give or take) according to the financial press. Miller is most well known for his streak of beating the S&P 500 for 15 years in a row as a mutual fund manager for Legg Mason. Michael Mauboussin estimated that the odds of pulling off this type of streak based on pure luck alone were someth...

Introducing My New Podcast: Animal Spirits with Michael & Ben

Mié, 11/15/2017 - 15:11
At our EBI Conference a couple weeks ago I must have been asked by 15-20 people how I find so much time to write. I wrote about this recently but beyond the usual time management/lifehack stuff that people like to read about on the Internet, it really comes down to an interest in the topic at hand. Basically, the best answer is I’m obsessed with the financial markets and all of the stuff that goes along with them. ...

Caution Alone is Not an Investment Strategy

Mar, 11/14/2017 - 19:02
There are no easy answers in the financial markets right now because of the run-up we’ve experienced over the past number of years. The alternative — lower valuations, higher yields, more bargains, etc. — is, however, worse because that would mean everyone would have less money in their portfolios. We have to play the hand we’re dealt and anyone who tells you with certainty they know how things wil...

One of the Biggest Sources of Market Inefficiency

Lun, 11/13/2017 - 03:27
In the U.S., the standard distance between railroad train tracks is four feet, eight-and-a-half inches wide. The reason for this distance is because that was the measurement used in England and the U.S. railroads were built by British expats. The reason the British used this distance is because it was the same measurement used on the old tramways (used for wagons) which preceded the railroads and the people who built the ...

The Next Bear Market

Vie, 11/10/2017 - 03:18
During the next bear market… …someone will become a hero. A pundit, portfolio manager or resident doomsayer will “call” the crash and nail the timing. It will be mostly luck but will likely lead to a number of TV appearances, speaking gigs, and maybe a book deal or two. …your favorite pundit won’t be able to save you from making irrational decisions. …there will be bargains in t...

How to Deal With Market-Moving News

Mié, 11/08/2017 - 22:01
It’s now been a year since the presidential election. While many were predicting the end of the world, U.S. stocks are up 24%, foreign developed stocks are up 23%, and emerging market stocks are up 23%. Allowing political beliefs to guide your investment ideas is not a useful strategy but people also get caught up looking for signals from potentially market-moving news or events where none exist. This piece I wrote ...

Considerations for Cashing Out of the Stock Market

Mar, 11/07/2017 - 20:34
There was a story in CNN Money last week about a 60-something part-time writer/librarian who cashed out all of the money she had in the stock market. Here’s what she did with it along with her reasoning behind the decision: Now all my money is stashed in U.S. Treasuries, Treasury Inflation-Protected Securities (or TIPS bonds), and laddered CDs, which, in the years to come, I can count on to earn me essentially nada....

What If You Only Bought at Below Average P/E Ratios?

Lun, 11/06/2017 - 03:24
A few years ago I wrote a post that is still far and away my most popular called What if You Only Invested at Market Peaks? I still regularly receive comments, caveats, and questions about this one. A recent follow-up question from a reader asks: What if you only put your money to work at below average P/E ratios? In theory, it would make sense that investing at lower valuations would give you better results considering ...

6 Things That Made Me Laugh at EBI East

Vie, 11/03/2017 - 18:20
Investment conferences are usually a great way to network and meet people but often end up being fairly boring with little entertainment value in terms of subject matter. A lot of this stems from the fact that it’s difficult for most people to make this stuff exciting but a large portion of the finance industry probably takes themselves too seriously. At our EBI East Conference yesterday in NYC I found myself more ente...

A Closer Look at Ray Dalio’s 1937 Scenario

Mié, 11/01/2017 - 18:46
Investors often evoke the old saying that history doesn’t repeat but it does rhyme. The problem is even when market scenarios do rhyme the differences far outweigh the similarities because every time is so different in the markets. Bridgewater Capital’s Ray Dalio has evoked the 1937 analogy for a few years now to describe the current market environment. While I have enormous respect for Dalio I wrote this piec...

The Increasing Importance of the 401k

Mar, 10/31/2017 - 18:54
Over the past few weeks there have been rumors floating around about potential changes to the 401k retirement contribution limits via the current debate around tax reform. The first rumor was they were going to cap it at $2,400/year, which is ridiculous. Then last week it came out they’re considering increasing it to $20,000 (the current rules will see the annual limit will increase from $18,000 per individual to ...

10 Questions I’m Pondering At the Moment

Dom, 10/29/2017 - 19:58
Some questions I’m pondering at the moment… 1. Which group is in the most trouble if we finally have the lower financial market returns everyone’s been predicting over the coming decade? Pension expected returns are probably way too high. These funds will have their reckoning at some point but I would be more worried about retirees who are banking on the returns they’ve seen in the recent past co...

The Great Reckoning in Retail

Vie, 10/27/2017 - 02:02
Next Thursday is our EBI Conference in New York City. The line-up for the conference is stacked — Liz Ann Sonders, Cliff Asness, Jason Zweig, Tim Buckley, Jim Ross, and a whole bunch of other well-known names from the asset management, financial media, and blogging worlds. There’s also NYU professor Scott Galloway who is one of the smartest voices on technology trends and companies right now. I love Galloway&...

Bull & Bear Market Volatility Look Very Different

Jue, 10/26/2017 - 02:57
Volatility is a tricky concept in the markets. Investors are constantly looking at how much markets are fluctuating to gauge where investor sentiment stands as a gauge for complacency, fear, or greed. In terms of predicting the end of a bull market, volatility gives us mixed signals. In this piece I wrote for Bloomberg I look into the historical track record to see if there are any relationship market volatility and previ...

An Investment Book for the Masses

Mar, 10/24/2017 - 18:51
Buy and hold was the first investing concept where the light bulb immediately went off in my head. It was elegant in its simplicity. It made sense. There are no barriers to entry for this type of strategy. Anyone who has the patience and mental fortitude can invest this way. It has its flaws but so does every investment strategy. My ideas have evolved over time but the idea of long-term investing has always resonated with...

What the Charts Don’t Tell You

Dom, 10/22/2017 - 19:27
This past week marked the 30th anniversary of the 1987 crash so there were plenty of reflections in the financial media and such. This chart made the rounds on social media: In some ways this type of chart is beautiful. It shows the power of human ingenuity, the benefits of long-term optimism, innovation, and progress in the business world. The point of this specific chart is also to show that the 1987 crash is a mere b...

What Could Send Bitcoin Into the Stratosphere?

Jue, 10/19/2017 - 22:45
I spoke at a conference this week and one of the first questions from the audience was about Bitcoin and my thoughts on cryptocurrencies as an asset class. My go-to phrase to sound intelligent (even though I have no idea) on this one is “Bitcoin may not be the ultimate winner in all of this but the blockchain technology is going to be revolutionary.” To be honest I really don’t know what the outcome of a...

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