2019 has been a good year for pretty much everything in the financial markets. U.S. stocks, long-term government bonds, and gold are all up big this year: I can’t remember a year when all three of these very different assets were all up so much at the same time. So I looked back at the…
Asset Allocation
Investing Proceeds From the Sale of a Business
What if you received a million dollars from the sale of a business in your early-30s?
The Optimal Portfolio
This year has been kind to stock and bond markets around the globe: But I’m sure there are some investors who hate to see the bond performance holding their portfolio back when stocks are doing so well. If we zoom out to the past year — which includes the brief bear market in late-2018 —…
A Lesson in Portfolio Correlations
Stocks and bonds have a long-term correlation close to zero. Why that’s a good thing.
3 Ways to Decrease Your Portfolio’s Volatility
Simple ways to decrease the volatility in your portfolio without getting to complex.
4 Overlooked Investment Decisions
In the hierarchy of institutional investors, pension plans get picked on the most. Endowments and foundations are the mean girls of this space, generally looking down at their pension brethren because they all assume pensions are the last to the party when it comes to innovative investment ideas. In my experience, this is often unwarranted…
Prudent Risk Management or Market Timing in Disguise?
A podcast listener asks: I work at a pension fund steadily losing performance chasing members (we were positioned too conservatively through the bull market) – and now the investment committee wants to be more “peer-aware”. I tend to think now is not the time to make a more aggressive allocation, but part of me also…
Will the U.S. Continue to Dominate?
Elroy Dimson, Paul Marsh, and Mike Staunton have been publishing the following chart in their annual update for some time now and every single year it blows me away: The U.S. market share looks like Pac Man preparing to eat the rest of the world. Michael and I discussed some of the reasons for the U.S. dominance…
Who Owns All the Stocks & Bonds?
Jesse Livermore once said, “Another lesson I learned early is that there is nothing new in Wall Street. There can’t be because speculation is as old as the hills. Whatever happens in the stock market today has happened before and will happen again.” In other words, humans are the one constant in the markets and…
Asset Allocation For Investors With an Appetite For Risk
A reader asks: I recently started my first real job, and I am currently setting up my 401k. I am selecting my asset allocation. Using the website portfolio visualizer, I have been back testing different allocations. I came across an interesting portfolio that beats most of the allocations on the website (Sharpe ratio and CAGR)….
