Earlier this week I took a look at how inflation has affected market returns over the years. As you can see from the chart below, inflation has historically run in excess of 4% one out of every three years while it has been 2% or higher two-thirds of the time: The next logical question — which…

In one of my favorite psychology books, Mindless Eating, there are a number of interesting studies that show how the way food is presented or described can have a huge impact on they way it’s viewed or rated. For example, a group of researchers took two pieces of day old cake. One was simply labelled…

Isaac Presley wrote a nice market update recently on his Cordant Wealth Partners blog. He broke down stock and bond yields by comparing some real (after-inflation) and nominal indicators to show where they currently stand in relation to their historical averages and ranges.

In Seeking Wisdom: From Darwin to Munger, Peter Bevelin has an interesting take on the frequency of extreme events: Statistics shows that the frequency of some events and attributes are inversely proportional to their size. Big or small changes can happen but the bigger or more extreme they get, the less frequent they are. For example, there…

The investment industry can be a very backwards place in many respects. For instance, seeing the price of a product go on sale generally makes people happy and induces them to buy more of it. In the markets, when things go on sale from a market crash that’s when investors are the most scared and…

We’re roughly seven months into the year and people are already starting to talk about how certain investment styles don’t work anymore. In the financial world, people act like seven months is considered statistically significant because everyone assumes that short-term trends trump all. The proliferation of a wide variety of new ETFs and mutual funds…

A reader asks: Should Social Security income be considered as part of the bond portion of a retired person’s asset allocation, thus increasing the stock portion? I’ve seen a number of opinions, articles and blog posts over the years about this question. It seems people tend to take a hard line and either say yes it…

GMO’s Ben Inker had a new piece out this week, and sticking with the firm’s theme from the past few years, he’s doing his best to lower investor expectations:

In The Education of a Value Investor, Guy Spier talks a lot about one of his biggest influences in the investment business — Mohnish Pabrai, who is a very well-known value investor. I’m a huge fan of Pabrai because of his simple, common sense way of looking at the world.

“60% of the time, it works every time.” – Brian Fantana