I saw the following headline on CNBC last week: This was the first response that popped into my head, as shared on Twitter: This is fairly simple, and some would say obvious, advice on the markets but sometimes investors need to be reminded of the simple and obvious The obvious stuff is often the first…

After writing about some of the reasons for the potential retirement crisis a few weeks ago I gave the standard prescription for the solution for most retirees — a combination of working longer, living on less, and reducing expectations for their retirement dreams. Then I received an email from two of my retired readers, Edd…

“There was never a genius without a tincture of madness.” – Aristotle People with brain damage may make better investment decisions. That’s the conclusion of a study from 2005 by a team of researchers who looked at the gambling habits of different subjects. They studied patients who had lesions in the emotional areas of their…

Risk is a tricky concept to grasp because most people don’t really understand what their true risks are. We tend to worry about things that are readily available in our memories while spending little time worrying about problems that could be years or decades out into the future. For the majority of investors, their biggest…

A couple weeks ago I wrote about how hard it is to offer investment advice without offering financial advice (or at the very least gaining a deep understanding of your client’s financial situation). The truth is there’s no perfect solution for offering financial advice or investment management. Every person, family or organization has varying degrees of…

I’m a big believer in the idea that simple beats complex so I’m always on the lookout for examples of this in the business world. I love the back story on Five Guys, the fast casual burger place. On the Five Guys’ website, founder Jerry Murrell says his mother always told him, “If you can give…

A reader asks: I wanted your advice about when do you recommend one sells holdings that have appreciated? I understand the concept of buying low but would appreciate your advice on when to sell. I understand reversion to the mean and have been guilty in the past of holding on too long, only to see all…

People in finance often say things because they make for good sound bites but don’t actually back them up with solid reasoning. Sound bites make you sound intelligent but rules of thumb always require some context. In this piece I wrote for Bloomberg I provide some context around one of the most misused phrases in…

The size of the global asset management industry is staggering. Boston Consulting Group estimates that as of year end 2016 there was close to $70 trillion in assets under management globally (meaning money that paid a fee for the management of assets). Here’s the breakdown showing the growth in worldwide AUM since 2002: It would only make sense…

In the 30 years ended 2016, the S&P 500 returned just over 10% per year. Compounding at that rate, fifty grand invested at the start of 1987 would have grown to nearly $875,000 by the end of last year. Not bad. Besides the usual caveats — taxes, fees, behavior, diversification, etc. — the problem with…