“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…

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…

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…

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…

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…

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…

I have to admit that even though I’m a bit of a World War II buff, I honestly don’t really know a whole lot about World War I. WWI gets short shrift because WWII had so many storylines that are almost impossible to fathom. I’ve been remedying this lack of WWI knowledge lately by listening to Dan Carlin’s account on…

In many ways the stock market makes no sense. You would assume that half of all stocks would outperform a market index while the other half would underperform. Then all you would have to do is pick from the top half and avoid the bottom half, make massive amounts of money and go buy an…

Following my recent piece on the future of the hedge fund industry, a reader asked: Interest rates are too low and stock market volatility is too high so we have to hold some alternatives in our client portfolios. Our problem is how do we benchmark these funds? S&P 500? 60/40 portfolio? A hedge fund index?…

One of the most impressive long-term stock market statistics has to be the historical 30 year returns on the S&P 500: This graph shows the rolling annual 30 year returns from the corresponding start dates. The worst 30 year return — using rolling monthly performance — occurred at the height of the market just before…