Expected Returns & The 7 Year Itch

GMO’s latest 7-year asset class return forecast leaves much to be desired: These forecasts are made on a real basis so they take inflation into account here but however you slice it, this is not a great look for expected returns. Obviously, expectations and reality don’t always sync up at an agreed upon equilibrium. GMO…

A Short History of Emerging Market Corrections & Bear Markets

Emerging market stocks as a group are dangerously close to the accepted definition of a bear market. Since peaking in late-January earlier this year, the MSCI Emerging Markets Index is now down 19.65% (not including dividends). It’s down around 10% on the year. If history is any guide, the stocks of these developing nations will…

The Art of Self-Control

I read a few things this week that had to do with control in some form or another that are worth highlighting. A study released earlier this year found people who have high self-control tend to experience less of those things that cause impulsive behavior such as fatigue, hunger, and stress: We found that trait…

The Half-Life of Investment Strategies

“The facts of the present won’t sit still for a portrait. They are constantly vibrating, full of clutter and confusion.” – William Macneile Dixon When I was growing up dinosaurs were described as slow, cold-blooded, reptilian, and not very colorful. New research has determined that many dinosaurs were in fact fast and could have been…

Animal Spirits Episode 42: Funding Secured

On this week’s Animal Spirits with Michael & Ben we discuss: Elon Musk and the prospects for Tesla actually going private. Was “funding secured” one of the best days ever on Twitter? Why are stock buybacks now the scapegoat for wealth inequality? How could we actually fix wealth inequality? Why housing plays such a large…

Some Thoughts on Investing in Real Estate

A reader asks: I’m a doctor and a lot of my colleagues are getting into real estate. There’s a group that invests in local deals in our area and all I have to do is write a check (no property management, upkeep, dealing with tenants, etc.). What are your thoughts on investing in real estate?…

8 Questions I’ve Been Pondering

Here are 8 random questions I’ve been pondering lately: 1. What if gold dies out with the boomer generation? The market value of gold around the globe is estimated at more than $7 trillion. I understand some of the reasoning behind the fact that people still put a lot of faith in the yellow rock —…

Bill Sweet Explains the New QBI Tax Deduction

I wish high schools and colleges would teach personal finance. They could show young people things like how to do their taxes, which it seems like maybe 3-4% of the population knows how to do (and that’s being generous). The U.S. federal tax code is around 4 million words and almost 75,000 page long. To…

The Layers of the Brain

Phineas Gage worked on a railroad construction crew in Vermont during the mid-1800s. While his crew was blowing up rocks using blasting powder to clear the way for a new rail line, a 13-pound iron rod was accidentally shot out from the explosion. It went through his cheek, left eye socket, and out the top…

Animal Spirits Episode 41: Despite All Logic

On this week’s Animal Spirits with Michael & Ben we discuss: The debacle that is MoviePass. Why Disney’s streaming service will be so successful. Does it matter that Fidelity now has two index funds with no fees? Myth-busting the idea that everyone had pensions in not-too-distant the past. Why the pension funding crisis is something…