Add John Bogle to the growing list of respected investors  — GMO, Research Affiliates, William Bernstein, Ray Dalio, Robert Shiller, Cliff Asness — who believe investors should temper their expectations for future market returns in the coming decade. From a recent interview with Morningstar: So, I think the best thing we can expect–and this is…

When new investors are just starting out in the markets they’re often told that a paper portfolio is a good way to test out a strategy without putting real money to work. This one sounds good in theory but is fairly useless in practice. The thing is that there are no simulations that can prepare…

Last week I wrote about the importance of goals-based investing and how it can be overlooked by the majority of those in the financial advice-giving business. Much of the blame in that post fell on the shoulders of financial professionals, but financial consumers are not innocent on this issue. One of my readers pointed out to…

Top quartile private equity performance is something every institutional fund aspires to. Of course, every single PE fund claims to be top quartile, which would seem to be mathematically impossible. David Swensen and his team at Yale have put together one of the most enviable track records in this space. This passage comes from the…

My colleague Josh Brown had an excellent piece in the most recent Fortune Magazine that asked a simple, yet loaded question: Are You Ready for the Next Bear Market? As we’ve seen from the seemingly never-ending market crash predictions over the past few years, no one really knows when the next bear market will hit….

Now for some context on the Sounds-Good-In-Theory Portfolio:

A reader asks: Is it ok to take 5 (or 10) percent of my portfolio and go crazy? I.e. Trade biotech stocks, one stock, options, or pork bellies, or SPX futures to satisfy my activity addiction. Before I give my thoughts on this subject, I think it makes sense to dig into the psychology behind…

One of the biggest problems with the way many financial firms operate is that they prescribe before they diagnose. They first create a product or portfolio and then try to convince people to invest in it. They try to make a sale without first gaining an understanding of their potential client’s circumstances. It’s completely backwards….

In nearly every heist movie from the 80s and 90s, the bad guys would always talk about stealing enough money to find a place on the beach and live off the interest. Here’s a classic from Hans Gruber in Die Hard (h/t Meb Faber): “Sitting on a beach, earning 20%” isn’t going to happen these…

Earlier this year Michael Santoli asked a number of bloggers what we ‘know’ about investing but can’t prove with stats. This was one of my responses: Supremely intelligent investors are well suited to run a fund but not an entire portfolio. I’d rather have an Ivy Leaguer run a hedge fund for me than a portfolio….