So you're a long-term investor, eh? You don't make emotional decisions, right? Then who's responsible for this: The above (courtesy of Bloomberg) shows that over the 4 trading days from Feb 1-6 "investors" (let's call them what they are...speculators) pulled a record $17.4 billion from the benchmark ETF tracking the S&P 500. People continue to [...]
It’s that time of year – time to fill out the Free Application for Federal Student Aid used by more than 99% of public universities. Many parents take the “why bother” approach. “We have too much money. We’ll never get any aid.” The first thought is usually “why did I have kids” while the second, [...]
Friday was painful, huh? The past few years of steady, positive returns have lulled us to sleep. It’s jarring for the plane to experience turbulence. But did we crash and burn? The higher the market the more irrelevant ‘point movements’ become. The 1987 Black Monday pullback of ~500 points was a one-day decline of 22%. [...]
Here’s an interesting look at the RORs of various asset classes over the past 10 years: Calculated values reflect returns of the following ETFs/ETNs: EM = iShares MSCI Emerging Markets ETF REITs = Vanguard REIT ETF Mid Cap = SPDR S&P MidCap 400 ETF Small Cap = SPDR S&P 600 Small Cap ETF Large Cap [...]
The amount of informational junk floating about is astronomical – content for the sake of content as we like to call it. The explosion began with 24-hour news channels. The low barriers to entry of Twitter, podcasts and the like have taken it to a new level. It’s created what we’ve often called an inverse [...]
Really enjoyed this Vox article about the fallacy of willpower. So many applications. From a financial planning perspective items #1 and #2 in the “what we can learn from people who are good at self-control” section hit close to home – the former b/c we’ve found clients that make choices as opposed to being forced [...]
It’s time to don the professorial robe for another lesson in econ 101. Today we deal with something we all know and love – money. In both a literal and figurative sense here’s the CliffsNotes version of the three basic functions of money: https://www.cliffsnotes.com/study-guides/economics/money-and-banking/functions-of-money See a problem? For a currency to serve as money it [...]
Despite what Rick James thinks the most powerfully addictive human drug is dopamine. We're all affected by it. For many of us it's at the core of why we are our own worst enemies when it comes to investing.
Using data from Morningstar we’ve compiled a list of the twenty mutual funds receiving the largest net cash inflows in 2017: Vanguard Total Stock Market Index Vanguard 500 Index Vanguard Total International Stock Index Vanguard Developed Markets Index Vanguard Total Bond Market Index Vanguard Emerging Markets Stock Index Oakmark International Prudential Total Return Bond American [...]
Behavioral psychologists know humans are OK being ignorant – we just hate being deprived of information. Big Media uses this to drive clicks and ratings. Which of the following headlines will make you want to read more? Woman loses 10 lbs by making this small change to her daily routine. Woman loses 10 lbs by [...]