Yes, Stocks and Bonds Can Rise Together

“Some men think that rules should be made of cast iron; I believe they should be made of rubber, so they can be stretched to fit any particular case and then spring back into shape again. The really important part of a rule is the exception to it.” – Paul Graham Stocks and bonds are…

Vetting Your Sources of Financial Advice

“Good advice rarely changes, while markets change constantly. The temptation to pander is almost irresistible. And while people need good advice, what they want is advice that sounds good.” – Jason Zweig Working in the investment industry and writing on this website means I get a decent number of people asking to me about the markets…

The S&P 500 Sector Quilt

“Rule number one: most things will prove to be cyclical. Rule number two: some of the greatest opportunities for gain and loss come when people forget rule number one.” – Howard Mark Here’s a breakdown of the S&P 500 sector ETFs ranked from best to worst performance by year over the past decade along with…

Book Review: Simple Wealth, Inevitable Wealth

“Wealth isn’t primarily determined by investment performance, but by investment behavior.” – Nick Murray I’m convinced that the majority of the behavioral problems that affect most individual and professional investors are all about perspective, not implementing the wrong tactics. There will always be more tactics presented to you every single day, but most of them…

Pattern Recognition

“Because people play an important role in determining the course of the financial markets, stock prices move like a manic-depressive.” – Howard Marks It looks like trading by individual investors is making a comeback. According to the Wall Street Journal, TD Ameritrade, E*Trade and Charles Schwab have all posted huge gains in trading volume to…

The CAPE Ratio and a Range of Historical Outcomes

“I tell investors using valuation is a spectrum of future possibilities.  While buying expensive markets generally will produce lower future returns, you will have positive outliers.  The same for cheap markets, it’s usually a good idea but they can always get cheaper.” – Meb Faber Meb Faber posted an interesting chart on his blog a…

Some Things You Will Never (Rarely) Hear From a Portfolio Manager

“Wall Street people learn nothing and forget everything.” – Benjamin Graham Portfolio managers have to be careful what they say in the press, through marketing materials and with clients. This is because, whether they admit it or not, they are first and foremost in the sales and marketing business (not that there’s anything wrong with…

Point/Counterpoint on Real Estate as an Investment Option

“A house is certainly not an investment, for one simple reason: You have to live somewhere, and you are either going to have to pay for it or rent it. Always remember, investment is the deferral of present consumption for future consumption, and it anything qualifies as present consumption, it is a residence.” – William…