“Whether you take a risk depends not just on the probability that you are right but also on the consequences if you are wrong.” – Peter Bernstein Common sense reader mailbag: You write a lot about investing in index funds. Are these truly the best investment option or are there alternatives that I should be…

Goals-based financial planning within your investment plan is a topic I have been wanting to write about for a while now. It’s very difficult to come up with a comprehensive investment plan if you don’t know why you are saving or what your long-term goals are.

“I skate to where the puck is going not where it has been.” – Wayne Gretsky I just wanted to share a few pieces of interesting data I came across this week to put the current state of the markets into context.

“Gifted, determined, ambitious professionals have come into investment management in such large numbers during the past 30 years that it may no longer be feasible for any of them to profit from the errors of all the other sufficiently often and by sufficient magnitude to beat market averages.” – Charles Ellis, 1975 Ted Williams is…

“The bad news is that reaching for yield rarely ends well.” – James Montier “Now, if you’re chasing yield, and you’re trying to make your fixed income “do” better, then all bets are off. That’s a dangerous game.” – Carl Richards I’ve been getting a lot of questions lately about peer to peer lending as…

“The key to happiness is low overhead and no debt.” – Lynda Barry Since average credit card rates are much higher than average financial market returns, taking on more debt is an easy route to creating a negative net worth. There are many strategies focused on saving more but not a whole lot gets written…

“That’s just a straight shooter with upper management written all over him.” – Bob Slydell Peter Gibbons: Our high school guidance counselor used to ask us what you’d do if you had a million dollars and you didn’t have to work. And invariably what you’d say was supposed to be your career. So, if you wanted…

“Even the intelligent investor is likely to need considerable will power to keep from following the crowd.” – Benjamin Graham The chart below, from Scott Krisiloff of Avondale Asset Management, shows the 15 top performing stocks from the Russell 1000 Index since 2003.

“Most people get interested in stocks when everyone else is. The time to get interested is when no one else is.” – Warren Buffett “If it makes me feel like I want to throw up, I can be pretty sure it’s a great investment.” – Brian Posner I hate some of the investments in my…

When we have success in our lives we tend to attribute that success to skill or hard work. When something goes wrong and we fail, we attribute it to bad luck. Sound familiar? I know I do this all the time. It’s easier than admitting that there was some luck involved in our wins and…