A large contingent of investors has been perplexed by the resilience of the markets and the economy throughout this cycle. Volatility in both stocks and economic growth remain muted even though they’ve been given plenty of excuses to go berserk. Eventually this stability will come to an end (it always does) but it’s worth discussing why…
A Death of Equities Redux
Although the stock market has risen for eight (going on nine) years in a row, the gains haven’t been felt equally by the investing public. Bloomberg shared some data Friday on stock market ownership broken out by age group and how it’s changed since the previous cycle peaked in 2007: In almost every age group, the…
The Curse of the Young Millionaire
The winter months can be brutal in Michigan. It’s cold. It’s snowy. It’s icy. It’s dark. The sun rarely peeks out from behind the clouds. I love the warm weather so at least once a year, probably around January or February, I fantasize about moving somewhere warmer and curse myself for living in the cold….
Animal Spirits Episode 6: Bitcoin, Bubbles & Bananas
On this week’s Animal Spirits with Michael & Ben we discuss: Bitcoin’s meteoric price rise. The difficulty of predicting the demise of a bubble. How price drives investor narratives. Why storytelling is so important for the spread of ideas. The problem with making saving money your sole goal in life. The difficulty of breaking through…
Some Market Myths That Hurt Investors
Investors are inundated with rules of thumb, anecdotal evidence, and soundbites that are put out there as 100% fact yet nothing to back them up. Markets don’t have hard and fast rules that you can follow where the future will always look like the past. But there are many myths purported to be true that…
Expert Judgment Or Lack Thereof
“Humility is attainable, even if forecasting accuracy is not.” Philip Tetlock As the 2018 market outlooks begin to flood my inbox I’m reminded of one of the best books written on the topic of expert forecasting abilities — Expert Political Judgment by Philip Tetlock. Tetlock released the first version of this book in 2006 but re-released an…
Rebalancing Your Personal Balance Sheet
A reader asks: I’d love to hear your thoughts on using stock market gains to pay down the mortgage. I’m struggling with that idea now. So you would be using equities to pay down debt to build up equity…and my head hurts. We in the finance community spend a lot of our time discussing market-related…
Animal Spirits Episode 5: Wave Pools & Market Inefficiencies
On this week’s Animal Spirits with Michael & Ben we discuss: The Vanguard of the alternative mutual fund world. Is active management too big? ETF prices wars The psychological impact of market valuation Career risk The shrinking U.S. stock market Wave pools The problem with backtests and market anomalies The polarizing nature of Elon Musk…
The Emerging Markets Performance Cycle
Through the end of the day Monday, emerging market stocks (as proxied by VWO) are up 28% in 2017 compared to a 17% gain in U.S. stocks (SPY). While U.S. stocks have been up for 8 years in a row, emerging markets have fallen 4 of the past 8 years. All stock markets are cyclical but EM stocks…
Peer Pressure
Yale Endowment CIO David Swensen doesn’t make too many public appearances so I was excited to run across a back and forth he had with Robert Rubin this past week at the Stephen C. Freidheim Symposium on Global Economics. Swensen touched on a number of subjects investors should be interested in from expected future returns, market…
