Death By a Thousand Cuts

In the U.S., over $13 trillion of institutional capital relies on consultants for advice on which funds to invest in. Pensions, endowments, foundations and other large pools of money utilize consultants for a range of services, most notably picking different outside money managers to invest in on their behalf. Research shows that investment consultants as…

Are Millennials Doomed in a Lower Return Environment?

Plenty of people in the finance world were talking about the study put out last week by the giant consulting firm McKinsey on the prospects for lower market returns over the next 30 years than we’ve experienced over the past 30. Here are the numbers from the report: And here’s the takeaway from Bloomberg: Turning 30…

Building Failure Into Your Process

Annie Duke has taken an interesting road to become a World Series of Poker champion. She was actually studying to receive her PhD in psychology at the University of Pennsylvania when she had a series of anxiety attacks. Duke was a month away from finishing her doctorate when she decided she couldn’t handle the stress….

The New Bond Market Reality

As I pointed out earlier this week on Twitter, this Goldman Sachs online savings account now pays a higher interest rate than the 10 year government bond yields in Japan, Germany, France, Belgium, Switzerland, The Netherlands and Sweden: (Side note: There are a number of these online savings accounts, so it’s not just Goldman that…

When Mediocrity Trumps Brilliance

The index investing revolution has made it abundantly clear that many investors are now starting to understand the zero sum nature of active management and the huge hurdle that high fees can present in the fund world. These stats that show the percentage of funds that underperform their benchmarks are commonly known and cited by…

180 Years of Market Drawdowns

“We tend to be inadequate historians.” – Robert Frey A couple weeks ago I covered a little discussed topic involving the 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…

Personal Finance is Personal

Nearly four out of five working households have retirement savings of less than one times their annual income. For those who carry a balance on their credit card, the average amount owed is over $15,000. Forty-seven percent of people would have a hard time coming up with $400 in the case of an emergency. The…

Why Money Manager Due Diligence is so Difficult

Early on in my career a portfolio manager told me a little secret about the money management business. He said, “Every professional asset allocator we talk to says they’re looking to evaluate our shop based on the four Ps — people, process, philosophy and performance. The four Ps are actually performance, performance, performance and performance.”…

Mean Reversion From the Lost Decade

A decent bull market sandwiched between two of the most brutal bear markets in history produced one of the worst 10 year stretches ever in the S&P 500* in the first decade of the 21st century. Many investors labeled the 2000s as the “lost decade” for stocks. Considering the S&P lost around 1% a year in…

How to be More Productive

“Productivity, put simply, is the name we give our attempts to figure out the best uses of our energy, intellect, and time as we try to seize the most meaningful rewards with the least wasted effort.” – Charles Duhigg I heard a joke at a stand-up show last year that went something like this: If…