The Difference Between a Correction and a Crash

A bear market is normally defined as a drop of 20% or more in stock prices. By this definition, according to BAML, there have been 25 bear markets since 1929. That means markets have averaged one roughly every 3.5 years or so. Unfortunately, market averages aren’t neat and tidy. They trade in both short and…

You Might Have Really a Long Time Horizon to Invest

The Atlantic published an interesting graphic recently on how the average life expectancy has changed from 1880 to today. In 1880, the average life expectancy was 39.4! Fast forward to a baby born in 2012 and their average life expectancy nearly doubles to just shy of 80 years. Each of the dots on the graph…

Why Does the Middle Class Hate Stocks?

“If you’re investing for a lifetime – and you should be, saving for retirement and educating your kids along the way – if you’re 20 years old now, you should be thinking 60 or 65 years as your time horizon.” – John Bogle

Are Small and Mid Cap Stocks Getting Pricey?

“An investor should have an adequate idea of stock market history, in terms particularly of the major fluctuations. With this background he may be in a position to form some worthwhile judgment of the attractiveness or dangers…of the market.” – Benjamin Graham

Second Level Thinking about Sector Investing

“We should try to find value among the knowable – industries, companies and securities – rather than base our decisions on what we expect from the less-knowable macro world of economics and broad market performance.” – Howard Marks Being a decent investor is fairly easy. You invest in low cost, highly diversified index funds, set…

James Montier’s Lessons on Behavioral Investing

“We will learn an enormous amount in the short term, quite a bit in the medium term and absolutely nothing in the long term. That would be the historical precedent.” – Jeremy Grantham (1) A bat and a ball together cost $1.10 in total. The bat costs a dollar more than the ball. How much…

How to Beat the Market Over 20 Years

“The goal of the advisor shouldn’t be to beat the market by picking stocks or winning funds. Advisors add value by providing the discipline required for successful investing. They add value in areas like tax efficiency, risk management, estate planning and retirement planning.” – John Bogle Investors on Wall Street are obsessed with beating the…

Are Pensions to Blame for the Retirement Crisis?

One of the prevailing theories on the sad state of affairs of the retirement statistics in this country is that our employers have failed us. The line of thinking goes like this: Employers used to provide the majority of workers with pension income for retirement as thanks for being a loyal employee.  Since pensions have…