While You Were Worrying…

Markets got off to a terrible start to the year. Small caps, emerging markets and international stocks were all in bear market territory. Here’s what happened next: Investors have spent an inordinate amount of time worrying about pretty much everything — real estate, oil prices (being too high or too low), interest rates, economic growth,…

Has There Ever Been a Better Time to be a Homebuyer?

As I continue my search for a new home in the real estate market I can’t help but think about how different my home-buying experience is from what it was like for my parents or others in previous generations. First of all the home search process is completely different. Everything is online these days and you…

The Upside of Academic Finance

My colleague Barry Ritholtz recently sat down to talk with Burton Malkiel — of A Random Walk Down Wall Street fame — on his Masters in Business podcast. Right off the bat Malkiel did some myth-busting on the Efficient Market Hypothesis: What efficient markets are associated with which is wrong is that efficient markets mean that…

Bill Gross & The 40 Year Black Swan

In his latest monthly missive, Bill Gross shares some thoughts on financial market returns from the past four decades: Since the inception of the Barclays Capital U.S. Aggregate or Lehman Bond index in 1976, investment grade bond markets have provided conservative investors with a 7.47% compound return with remarkably little volatility. An observer of the…

Pursuing the Right Goals

“I think I’ve been in the top 5% of my age cohort all my life in understanding the power of incentives, and all my life I’ve underestimated it. And never a year passes but I get some surprise that pushes my limit a little farther.”               – Charlie Munger…

Animal Spirits in the Real Estate Market

My wife and I bought our first home in late-2007/early-2008. As real estate agents like to say, it was a buyer’s market. The real estate market had peaked a few years earlier. The worst was yet to come but people were already starting to feel the pinch. It seemed the best way to get a…

How The Finance Industry Tricks You

One of the problems with the typical “trust me, we got this” attitude that you often see with financial professionals is the fact that most of the time their unwitting clients don’t really even understand what’s going on in their own portfolios. There are really no independent parties overseeing the overseers so a lot of…

How Return Assumptions Affect Investor Behavior

Higher than average U.S. stock market valuations and lower-than-average interest rates would lead any rational individual to assume that future market returns should be lower than average from current levels. This is a reasonable assumption when you consider a simple 60/40 U.S. stock/bond portfolio has just had one of the best five year runs in…

Returns on Your Social Security

There will be roughly 10,000 baby boomers retiring every single day for the next 20 years or so. Entire industries and jobs are going to need to be created for the sole purpose of servicing this group. Healthcare comes to mind, but financial services will be in high demand as well, especially when you consider…

Lessons From Losing Big

What I Learned Losing a Million Dollars is easily one of the most underrated investment books I’ve come across. The book was actually first published in the early 1990s but re-released a few years ago. It tells the story of Jim Paul, a former futures trader on the Chicago Mercantile Exchange who made a sizeable…