When Saving Trumps Investing

As Warren Buffett was closing in on age 60 in 1989, his net worth was $3.8 billion according to the Forbes List. This year, as Buffett approaches his mid-80s, he’s worth $58.5 billion. That means nearly 94% of Buffett’s current net worth was created after his 60th birthday. I’ll come back to these facts again…

How Interest Rates Affect the Behavior Gap

“At any given moment, what the market is doing reflects how we’re feeling right NOW. Not how we’ll feel tomorrow and most likely not how we’ll feel in a month, let alone a year. Short-term market behavior is rarely about anything other than an interpretation of what we THINK is happening or will happen as…

A Check-Up on GMO Fund Performance

“Believe there are bubbles, but don’t go around looking for them and betting the ranch on them.” – Cliff Asness Jeremy Grantham is a legend among investing circles. His quarterly letters are on my must-read list. I’ve seen him speak before and he has the uncanny ability to make complex investing topics easy to understand, which I…

Yes, Stocks and Bonds Can Rise Together

“Some men think that rules should be made of cast iron; I believe they should be made of rubber, so they can be stretched to fit any particular case and then spring back into shape again. The really important part of a rule is the exception to it.” – Paul Graham Stocks and bonds are…

Vetting Your Sources of Financial Advice

“Good advice rarely changes, while markets change constantly. The temptation to pander is almost irresistible. And while people need good advice, what they want is advice that sounds good.” – Jason Zweig Working in the investment industry and writing on this website means I get a decent number of people asking to me about the markets…

The S&P 500 Sector Quilt

“Rule number one: most things will prove to be cyclical. Rule number two: some of the greatest opportunities for gain and loss come when people forget rule number one.” – Howard Mark Here’s a breakdown of the S&P 500 sector ETFs ranked from best to worst performance by year over the past decade along with…

Book Review: Simple Wealth, Inevitable Wealth

“Wealth isn’t primarily determined by investment performance, but by investment behavior.” – Nick Murray I’m convinced that the majority of the behavioral problems that affect most individual and professional investors are all about perspective, not implementing the wrong tactics. There will always be more tactics presented to you every single day, but most of them…

Pattern Recognition

“Because people play an important role in determining the course of the financial markets, stock prices move like a manic-depressive.” – Howard Marks It looks like trading by individual investors is making a comeback. According to the Wall Street Journal, TD Ameritrade, E*Trade and Charles Schwab have all posted huge gains in trading volume to…