The Expectations Game

In the latest episode of our podcast, Michael and I discussed the relationship between corporate earnings and stock market performance. I’ve done some work on this in the past so I went through and updated my data on earnings growth versus stock market returns by decade: It may also be helpful to view these numbers…

The Vanguard Endowment Model?

Useful benchmarking is one of the hardest things to do for institutional investors because of the way they structure their portfolios. Take a look latest asset allocations for college endowment funds from the annual study done by the National Association of College University Business Officers (NACUBO): Alternative investments are now the biggest allocation for all…

When Mental Models Fail

Lynn Hill is a world-renowned rock climber. Widely regarded as one of the sport’s best climbers in the 80s and 90s, she won more than 30 international climbing titles. In the summer of 1989, she was about to climb what she termed a “relatively easy” route in France. At the base of a cliff she…

Animal Spirits Episode 14: Cash on the Sidelines

On this week’s Animal Spirits with Michael & Ben we discuss: My recent trip to Disney. Has the Fed been punishing savers through low interest rate policies? What’s a retiree to do when yields are so low? Is there a fair valuation for the stock market? Has it changed over time? Are investors holding too…

What To Do When Your Stocks Are Soaring?

Bull markets seem like they should be easier than the alternative but even dealing with gains can be challenging as an investor. Research shows that investors trade more often during bull markets because we don’t know what to do with gains, it’s difficult to hold winners, and there are constant temptations with even bigger winners…

All-Time Highs, Risk & Consequences

In my first book I went through 14 market myths using history as a guide. Myth #9 was that all-time highs in the stock market mean it’s going to crash. I shared the following: The S&P 500 hit new all-time highs in early 2000 and subsequently crashed by more than 50 percent over the following…

Some Lessons For Living From Older Generations

The Guardian recently ran a piece written by 94-year-old Harry Smith. Smith waxed poetic on his description of what growing old has meant to him: People should not look at their approaching golden years with dread or apprehension but as perhaps one of the most significant stages in their development as a human being, even…

10 Money Revelations in My 30s

A note from your editor (me): I’m on vacation so no new podcast episode this week. We’ll be back on our regular schedule next week. I’ll maybe even provide some financial tips from my trip to Disney World. In lieu of the podcast, please enjoy this piece I wrote about some money realizations I’ve had…

180 Years of Stock Market Drawdowns

“We tend to be inadequate historians.” – Robert Frey A couple weeks ago I covered a little discussed topic involving the use of historical market data. Namely that you have to take market returns that go back to the turn of the 20th century with a grain of salt because of the fact that costs were much…

Investment Management vs. Financial Advice

There’s never been a better time to be an investor. Expenses are coming down. It’s cheaper than ever to trade. Strategies that were once reserved for large institutional funds at exorbitant fees are now available to every investor through low-cost mutual funds and ETFs. The sheer amount of data and computing power available has completely leveled…