A Lesson in Portfolio Correlations

“It seems like the higher mathematics with more false precision should help you but it doesn’t. They teach that in business schools because, well, they’ve got to do something.” – Charlie Munger I received a number of comments on my Do You Need Commodities in Your Portfolio? post from fans of investing in commodities. Many…

5 Questions

“If I ask you what’s the risk in investing, you would answer the risk of losing money. But there actually are two risks in investing: One is to lose money and the other is to miss opportunity. You can eliminate either one, but you can’t eliminate both at the same time. So the question is…

The Small Cap Value Cycle

“Smart Beta is not a panacea that provides unlimited supplies of excess return without extra risk. That’s not the way things happen on Wall Street. If you’re not ready for a lifelong commitment to this strategy, then it’s not for you.” – Rick Ferri

An Investing Master’s Degree in History & Math

“Develop into a lifelong self-learner through voracious reading; cultivate curiosity and strive to become a little wiser every day.” — Charlie Munger Following The Four Abilities Every Investor Needs to be Successful post from a few weeks ago, I received a number of reader requests for book recommendations to learn more about financial market history and…

How Financial Advisors Can Fend Off the Robots

“When clients pay attention to noise, we call it dumb. When advisors do it, we call it research.” – Carl Richards Business Insider ran the following graph with data from a recent Oxford University study on the jobs that are most at risk of being replaced by robots in the future (click to enlarge): I’ve…

Beware Stock Picks From Your Favorite Media Pundit

“Never ask a barber if you need a haircut.” – Warren Buffett The Mutual Fund Observer by David Snowball is fast becoming one of my favorite investing reads. He packs his monthly update with a ton of information and analysis on mutual funds, investment strategies, portfolio managers and the markets at-large. In the latest edition…

Do You Need Commodities in Your Portfolio?

“Early adopters reap the initial high returns and low correlations of a novel asset class; then one or more multiple academic and trade journal articles will describe those benefits, always accompanied by plump, curvaceous two-dimensional mean-variance plots. Last come Readers Digest versions in the mass media.” – William Bernstein The common refrain from many financial…

You Can’t Always be a Contrarian

“Since the basic game is so favorable, Charlie and I believe it’s a terrible mistake to try to dance in and out of it based upon the turn of tarot cards, the predictions of “experts,” or the ebb and flow of business activity. The risks of being out of the game are huge compared to…

The Larry Swedroe 5/25 Rule

“Rebalancing, or the process of restoring a portfolio to its original composition, is integral to the winning investment strategy. It requires you to buy what has done relatively poorly (at relatively low valuations) and sell what has done relatively well (at relatively high valuations).” – Larry Swedroe Larry Swedroe has an interesting strategy for rebalancing…