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Personal Finance, Investments & Markets
Actualizado: hace 2 mins 53 segs

The Biggest Thing I Got From an MBA

Dom, 02/18/2018 - 18:36
I didn’t really have a good reason to get my MBA. I already had the CFA designation and going to business school wasn’t going to change the trajectory of my career all that much…or so I thought. Business school didn’t teach me to be any better at running a business or leadership or financial theory or entrepreneurship. I don’t believe you can learn these things in a classroom. Certain things ...

Decision Regret

Jue, 02/15/2018 - 21:43
One of the hardest parts of the decision-making process in any endeavor stems from the fact that there are no counterfactuals. You can’t simply run a simulation and create a decision tree to show how different decisions and variables would affect the outcomes of each and every big decision you make. This leads to what psychologist David Bell calls decision regret. In terms of our finances, this occurs when we focus ...

Animal Spirits Episode 16: The Meltdown

Mié, 02/14/2018 - 13:57
On this week’s Animal Spirits with Michael & Ben we discuss: Our thoughts on the market correction. What happens when there’s nowhere to hide and correlations go to one. What we personally did, if anything, during last week’s sell-off. The countless reasons everyone is giving for the latest downturn. Why managed futures had such a poor showing in this correction. The untested majority of young fund ...

The New Permanent Portfolio For Millennials

Mar, 02/13/2018 - 18:54
The original permanent portfolio was created by Harry Browne and consists of the following allocation: 25% in U.S. stocks 25% in long-term bonds 25% in gold 25% in cash The idea behind this portfolio is that it’s diversified enough to get you through a wide variety of economic and market environments and simple enough that even a caveman could do it. There are holes you could poke in this allocation but that&#821...

Some Random Observations On The Market Correction

Dom, 02/11/2018 - 18:39
Some random observations as things have gotten interesting once again in the stock market… This is the exciting part. It’s more fun when stocks rise but part of me can’t help but be excited by a market correction. Maybe this is because I work in the industry but the psychology of market downturns fascinates me to no end. I also feel strongly that these are the types of markets where successful investor...

The Drawbacks of Behavioral Finance During a Market Correction

Vie, 02/09/2018 - 03:45
The stock market got interesting again this week. Volatility is back after having gone missing for the past 18 months or so. I saw the following words spewed across the financial media this week: turbulence, fear, pain, panic, distress, agony. It’s still a little early for all of that. As of the close on Thursday, the S&P 500 is a little over 10% from its all-time highs. But try telling that to your emotions whe...

Yield Curve Inversions Aren’t Great For Stocks

Jue, 02/08/2018 - 04:26
There are no can’t-miss-works-every-time signals in the stock market or the economy. It’s never quite that easy. But inverted yield curves have been a fairly reliable indicator in the past in terms of danger ahead for stocks and the economy. I did a deep dive on what this could mean based on historical observations in a piece for Bloomberg. ******* Predicting when the next recession will begin is no easy task becaus...

Animal Spirits Episode 15: The Noobwhale

Mié, 02/07/2018 - 14:55
On this week’s Animal Spirits with Michael and Ben we discuss: Why the crazy volatility in stocks shouldn’t be that surprising. The hidden risks in alternative investments. Why private equity is riskier now than it was in the past. Does it make sense for financial advisors to play the money managers selection game? Is picking stock pickers even hard than picking stocks? Bitcoin crashes and noobwhales. Why wom...

It’s Not Too Late

Mar, 02/06/2018 - 16:50
Stocks have gotten hammered over the past 10 days or so, culminating in that 4% woosh down yesterday. These things happen but it’s never easy to deal with from a psychological perspective. Stocks were getting hammered again in overnight futures but as I type this they’re up down up down all over the place. When things are up people want to be buyers and when things are down they want to be sellers. But when th...

The Expectations Game

Dom, 02/04/2018 - 21:01
In the latest episode of our podcast, Michael and I discussed the relationship between corporate earnings and stock market performance. I’ve done some work on this in the past so I went through and updated my data on earnings growth versus stock market returns by decade: It may also be helpful to view these numbers in real terms as well as inflation can have an impact on these results: Some thoughts on these numbe...

The Vanguard Endowment Model?

Vie, 02/02/2018 - 16:51
Useful benchmarking is one of the hardest things to do for institutional investors because of the way they structure their portfolios. Take a look latest asset allocations for college endowment funds from the annual study done by the National Association of College University Business Officers (NACUBO): Alternative investments are now the biggest allocation for all but those endowments with $100 million or less. The bigg...

When Mental Models Fail

Jue, 02/01/2018 - 21:56
Lynn Hill is a world-renowned rock climber. Widely regarded as one of the sport’s best climbers in the 80s and 90s, she won more than 30 international climbing titles. In the summer of 1989, she was about to climb what she termed a “relatively easy” route in France. At the base of a cliff she threaded her rope through her harness but instead of tying off the knot she noticed her shoe was untied. She then...

Animal Spirits Episode 14: Cash on the Sidelines

Mié, 01/31/2018 - 14:51
On this week’s Animal Spirits with Michael & Ben we discuss: My recent trip to Disney. Has the Fed been punishing savers through low interest rate policies? What’s a retiree to do when yields are so low? Is there a fair valuation for the stock market? Has it changed over time? Are investors holding too much or too little cash in their brokerage accounts? Do different cultures have different feelings about...

What To Do When Your Stocks Are Soaring?

Mar, 01/30/2018 - 21:05
Bull markets seem like they should be easier than the alternative but even dealing with gains can be challenging as an investor. Research shows that investors trade more often during bull markets because we don’t know what to do with gains, it’s difficult to hold winners, and there are constant temptations with even bigger winners elsewhere. This piece I wrote for Bloomberg looks at how to deal with big gainer...

All-Time Highs, Risk & Consequences

Lun, 01/29/2018 - 02:46
In my first book I went through 14 market myths using history as a guide. Myth #9 was that all-time highs in the stock market mean it’s going to crash. I shared the following: The S&P 500 hit new all-time highs in early 2000 and subsequently crashed by more than 50 percent over the following two years or so. New highs were once again breached in late-2007, which was then followed by another 50 percent-plus decl...

Some Lessons For Living From Older Generations

Vie, 01/26/2018 - 03:56
The Guardian recently ran a piece written by 94-year-old Harry Smith. Smith waxed poetic on his description of what growing old has meant to him: People should not look at their approaching golden years with dread or apprehension but as perhaps one of the most significant stages in their development as a human being, even during these turbulent times. For me, old age has been a renaissance despite the tragedies of losing ...

10 Money Revelations in My 30s

Mié, 01/24/2018 - 13:44
A note from your editor (me): I’m on vacation so no new podcast episode this week. We’ll be back on our regular schedule next week. I’ll maybe even provide some financial tips from my trip to Disney World. In lieu of the podcast, please enjoy this piece I wrote about some money realizations I’ve had in recent years. ******* A few things I’ve come to realize about money as I recently hit the mid-p...

180 Years of Stock Market Drawdowns

Mar, 01/23/2018 - 03:07
“We tend to be inadequate historians.” – Robert Frey A couple weeks ago I covered a little discussed topic involving the use of historical market data. Namely that you have to take market returns that go back to the turn of the 20th century with a grain of salt because of the fact that costs were much higher in those days so no one was really receiving those gross returns on a net basis. The natural follow-up ques...

Investment Management vs. Financial Advice

Dom, 01/21/2018 - 16:58
There’s never been a better time to be an investor. Expenses are coming down. It’s cheaper than ever to trade. Strategies that were once reserved for large institutional funds at exorbitant fees are now available to every investor through low-cost mutual funds and ETFs. The sheer amount of data and computing power available has completely leveled the playing field in many ways between the pros and amateurs. And there...

Why You Should Be Working Less

Jue, 01/18/2018 - 22:14
I still remember the exact moment I decided I would never work in the investment banking industry under any circumstances. It was my senior year of college and I had just started an internship with an investment firm. At that point I had no clue what I wanted to do with my life but I knew I wanted to work in finance in some capacity. Investment banking sounded like a decent option because it paid well and apparently you l...

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