“Beware of geeks bearing formulas.” – Warren Buffett Research Affiliates puts out some of the most interesting and thought-provoking research in the investment industry. Founder Rob Arnott’s work on fundamental indexing is especially innovative. The firm’s latest piece looks at smart beta and a host of factor investing data. One factor they looked into was the…

You can’t go a single day without seeing at least one news story about the Millennials. I’ve heard it all about my generation at this point — we don’t know how to invest; we aren’t buying homes or cars; we live in our parent’s basement; we have too much student loan debt; we aren’t getting…

“It is better to be roughly right than precisely wrong.” – John Maynard Keynes Financial theory tells us that portfolio construction is about finding a group of assets with low correlations to one another in an attempt to find the highest return for a given level of risk. This is one of the main benefits of…

“Life is not complex. We are complex. Life is simple, and the simple thing is the right thing. – Oscar Wilde Financial markets are complex, non-efficient and at times extremely volatile. This dynamic causes investors to forget about their long-term process during times of turbulence. Investors become vulnerable to deviations from an investment plan when short-term market pain…

“We must base our asset allocation not on the probabilities of choosing the right allocation but on the consequences of choosing the wrong allocation.” – Jack Bogle One of the most important decisions investors have to make when constructing a portfolio is how to spread their investments between stocks, bonds, cash and other investments. Asset…

“Any time anybody offers you anything with a big commission and a 200 page prospectus, don’t buy it.” – Charlie Munger These aren’t written in stone, but they give you a good idea about some of the unfortunate realities of the investment business. All else equal, a talented sales staff will trump a talented investment…

“Even investors who were guided by a quantitative stock selection system can let their human inconsistencies hogtie them.” – Jim O’Shaughnessy

“Far more money has been lost by investors preparing for corrections, or trying to anticipate corrections, than has been lost in corrections themselves.” – Peter Lynch I recently came across an old Peter Lynch interview for Frontline on PBS from the mid-1990s. In it the legendary former mutual fund manager discusses a wide range of…

“The only investors who shouldn’t diversify are those who are right 100 percent of the time.” – John Templeton It’s often said that diversification is the only free lunch in finance. However, this an incomplete statement because diversification alone doesn’t get you all the way there. There are no benefits to diversification if you don’t…

“Risk comes from not knowing what you’re doing.” – Warren Buffett I got some pushback on my piece last night called Why Does Buy and Hold Have to be Impossible?. I know what you’re thinking — people disagreeing on the Internet!? Here are some clarifications on some of the main topics covered: Think and Act for the…