First of all let me say this — no one knows what’s going to happen based on last night’s election outcome. The people who have been wrong about this outcome for so long will be the same ones who will tell you exactly how it will play out from here. They will be wrong again….

A few weeks ago I wrote about 10 purchases that are worth the money, but threw in a caveat about one of them — buying a house: I think the idea of buying a starter home is one of the worst moves you can make financially as a younger person. Buying a starter home will…

One of the hardest parts about investing is that prudent advice doesn’t always work. Risk management doesn’t always add value. Legitimate strategies can go long stretches where they don’t work very well. Diversification means you’ll always hate something in your portfolio. Junk stocks can outperform high quality companies depending on the starting prices and valuations….

I just finished reading David McCullough’s critically acclaimed book, The Wright Brothers. Going into it I didn’t really know too much about the fascinating story beyond that historic first flight at Kitty Hawk in 1903. That first flight garnered little fanfare at the time (most people just didn’t believe it was possible), but the innovation that followed…

The S&P 500 last closed at an all-time high in mid-August. We’re only 3-4% away from that number and stocks haven’t done much lately, but many investors become very nervous when they hear about all-time highs in the market. After all, the S&P 500 got cut in half following all-time highs in early-2000 and late-2007. Therefore,…

“High prices attract buyers, low prices attract sellers.” There are generally two reasons for a given investment strategy to “work” over time: You earn a premium by accepting more risk. You take advantage of the behavior of other market participants. If I put my rational, textbook theory cap on, number one should make sense. But there’s…

If I had to pick just one behavioral bias to help understand why people make the decisions that they do it would be loss aversion. Daniel Kahneman’s research discovered that people regret losses around twice as much as gains make them feel good. Some people will look at these types of biases and conclude that…

Investors have to take some personal responsibility for their own actions, but one of the reasons so many people struggle with their investments is because many in the field of finance tend to perpetuate myths, rules of thumb and assumptions that just aren’t true. Here are some that come to mind that can be harmful…

Here’s a fascinating stat from Vanguard CEO Bill McNabb (who recently sat down for another podcast interview with Barry Ritholtz): One of the figures I always love to describe to people is — in 2000 the Internet was just starting to take hold, we had about $500 billion under management with 12,000 people. Today we’re…

As of the end of 1999, it’s estimated that there was roughly $400 billion in assets under management in hedge funds. Fast forward to today and there’s almost $3 trillion in AUM, a compounded annual growth rate of almost 14% (much higher than the returns earned). I think the real turning point for the huge…