Lessons From Thinking Fast and Slow

“If there is time to reflect, slowing down is likely to be a good idea.” – Daniel Kahneman Thinking Fast and Slow is a fascinating book by Nobel Prize winner Daniel Kahneman. It is full of interesting studies that have been performed over the years to learn how to think about thinking and how we…

How to Lose Money with the Stock Market at All-Time Highs

“When things are going well and prices are high, investors rush to buy, forgetting all prudence. Then when there’s chaos all around and assets are on the bargain counter, they lose all willingness to bear risk and rush to sell. And it will ever be so.” – Howard Marks Stock markets around the globe continue…

Should I Save More in My 401(k)?

“I’ve got all the money I’ll ever need, if I die by four o’clock.” – Henny Youngman Common sense reader mailbag: I would like to increase the percentage of my salary that I put into my 401(k) but I’m nervous with the stock market trading at all-time highs? Should I wait for a pullback in…

How to Invest 100% of Your Portfolio in the Stock Market

Disclaimer: I do not know your risk profile or time horizon as an investor so I cannot possibly gauge your suitability for the investment strategy I am about to discuss. I am simply showing how this can be done for those that determine that they have the time horizon and tolerance to take on the…

How Do You Earn Higher Rates on a Savings Account?

“The return OF capital is more important than the return ON capital.” – Old Investing Proverb Common Sense Reader Mailbag: I’m getting sick and tired of earning such low interest rates on my savings account. Should I invest in stocks or bonds to get a better return on this money? What are my alternatives if…

Why Picking Stocks is Even Harder Than You Think

“Investing is simple, but not easy.” – Warren Buffett There are many factors one has to consider when buying a stock. You must determine the competitive advantage that the company has over its competitors.  You must gauge the consistency of their operating history and what the long-term prospects are for the company. It also makes…

How to Create a Disciplined Investment Plan

“With broad asset classes, we want to take advantage of the mathematics of mean reversion. And so when any asset class runs too far ahead, it automatically gets trimmed back.  And when it falls too much, it automatically gets bought. It just happens “automatically” through math. Look, we know any individual stock can go to zero. But…

How to Pick Active Mutual Funds (If You Have to)

“Investors should remember that excitement and expenses are their enemies.” – Warren Buffett Index funds and ETFs make the most sense as an investment vehicle for investors for a number of reasons. They have lower expense ratios than active mutual funds. They are more tax efficient. They trade less so they have lower transaction costs.

Lessons From an NBA Legend

“I made mistakes. Plenty of them. In fact, sometimes I wish I could climb into a time machine and go back to shake some sense into that thirty-year-old me.” – Kareem Abdul-Jabaar A wonderful way to figure out where to focus your time and energy for your financial goals when you are younger is to…

What if You Won the Lottery?

“If you really want something in life you have to work for it.  Now quiet! They’re about to announce the lottery numbers.” – Homer Simpson The lottery question is one that people love to discuss when the jackpot reaches some astronomical sum in the $300-400 million range. People rush out to buy more lottery tickets….