Respect the Power of Mean Reversion

“From financial history and from my own experience, I long ago concluded that regression to the mean is the most powerful law in financial physics: Periods of above-average performance are inevitably followed by below-average returns, and bad times inevitably set the stage for surprisingly good performance.” – Jason Zwieg Investors love to tell themselves stories…

How Herbert Dow Put Germany Out of Business

“Common sense is not so common.” – Voltaire Here’s a really interesting business story about Hebert Dow (founder of Dow Chemical) that was featured on Quora this week: Herbert Dow founded Dow Chemical in Midland, Michigan when he invented a way to produce bromine cheaply. He sold the chemical for industrial purposes all over the…

How to Choose Yourself

“Weakness of attitude becomes weakness of character.” – Albert Einstein A recent Gallup study showed that only 30% of American workers feel engaged or inspired by their jobs. That leaves 70% who are not reaching their full potential. And about 52% said that they put in time and effort, but just don’t have energy or…

You Can Lose Money in Cash

“Stocks are the thing to own over time. Productivity will increase and stocks will increase with it. There are only a few things you can do wrong. One is to buy or sell at the wrong time. Paying high fees is the other way to get killed. The best way to avoid both of these…

Vanguard’s Principles For Investing Sucess

“Investors should remember that excitement and expenses are their enemies.” – Warren Buffett In Vanguard’s most recent newsletter they laid out their four timeless principles to help you reach your investing objectives. They are: 1. Goals: Create clear, appropriate investment goals. 2. Balance: Develop a suitable asset allocation using broadly diversified funds. 3. Cost: Minimize…

The Common Sense Budget

“A budget tells us what we can’t afford but it doesn’t keep us from buying it.” – William Feather “Don’t tell me where your priorities are. Show me where you spend your money and I’ll tell you what they are.” – James W. Frick To invest you first must be able to save.  I like…

Real Financial Advisors

“When clients pay attention to noise, we call it dumb. When advisors do it, we call it research.” – Carl Richards I feel that most investors should be able to manage their investments on their own. The playing field has been leveled in the past few decades, giving individual investors the ability to handle their…

Should We Be Forced to Save For Retirement?

“In an ideal world everyone would generate sufficient savings on their own to help fund their own retirement. However most of the data shows that Americans are simply unable to do this on their own.” – Tadas Viskanta In one of my MBA classes on leadership and organizational behavior we went over the five personality…

Interest Rate Risk

“We have an entire generation of investors who have never experienced a rising rate environment.” – Gary Cohn, Goldman Sachs If you missed the first 5 parts in my series on bond investing be sure to read: Part 1 – Investing in Bonds Part 2 – Why Bother Investing in Bonds? Part 3 – Bond Investment…