Jason Zweig’s weekend column in the Wall Street Journal touched on an important issue that’s doesn’t get enough attention in the fund industry — closing a fund that has become too large to outperform. There’s a difficult trade-off between managing for outperformance and gathering assets (and fees) because at a certain point most strategies can’t scale…

Gustave Le Bon was a French psychologist who wrote The Crowd: A Study of the Popular Mind all the way back in 1895. The passage sums up his findings pretty well (emphasis mine): The most striking peculiarity presented by a psychological crowd is the following: Whoever be the individuals that compose it, however like or unlike be their…

Like most professions, everything is not always as it appears in the finance industry. Here are a few truths you will rarely hear from anyone who works in finance. No one really knows what’s going on most of the time. It’s been well documented that not many people are very good at predicting the future, especially…

According to Variety, Vice News is set to launch a web-based personal finance show geared towards millennials: Vice News this week will launch a personal-finance talk show on YouTube, “The Business of Life,” sponsored by Bank of America, which youth-skewing brand says will fill a gap in the media landscape for financial advice aimed at…

There was some good discussion on my post from last week about the return numbers on the S&P 500 from 1934-1953 (see Stock Market Losses With Low Interest Rates). A reader made the comment that it was unrealistic to use S&P 500 returns from that time because there were no index funds in existence back…

One of the most interesting aspects of asset bubbles is that they pull returns forward from future years. Or on the flipside, they lead to lower returns for a number of years when you invest closer to the peak. The NASDAQ was down 80% after the tech bubble burst following the nearly 500% performance during…

A few weeks ago I wrote about The Psychology of Sitting in Cash and a reader left a great comment about how he has tried to solve this problem in his own portfolio using the financial crisis as an example:

One of the most heavily debated topics in retirement planning is figuring out the safe withdrawal rate. The general rule of thumb is 4% of your portfolio, but if you have the bulk of your assets in tax-deferred accounts such as a 401(k) or IRA, the government makes it easier on retirees to figure out…

I’ve been writing a lot lately about personal finances because it seems like every week another report comes out showing how ill-prepared people are when it comes to their financial situation. My friend James Osborne asked me if I really think people can be taught to live within their means. I do think it’s possible,…

Just when I think things are slowly turning in favor of the financial consumer, I’m reminded of Wall Street’s old ways of doing things like putting fees, profits and margins ahead of client interests. There were three things I saw this week that showed Wall Street’s old guard isn’t going to go down without a…