A couple weeks ago I gave some advice to a young person that was invested with a robo-advisor. I urged patience and giving up on the goal of a perfect portfolio, especially when you come to the decision that you would like to invest in a low-cost, diversified asset allocation approach. One of my younger…
What Would You Say…You Do Here?
One of the most interesting lines from the new Carl Richards book is when he talks about how hard it is to decipher the many different roles in the financial industry I know of no other industry where it’s harder to figure out who does what. It’s easy to shake your head when you read a…
A Closer Look at the U.S. Government’s Retirement Plan
The Thrift Savings Plan (TSP) is the defined contribution retirement plan for U.S. Federal government employees. The TSP has nearly 5 million participants and over $500 billion in assets under management. I’m on record saying I think the TSP should be offered to all U.S. workers in addition to their current plan (or those that…
The Behavior Gap Financial Plan
“The One Page Financial Plan isn’t about getting things “right.” It’s realizing that you will always get things a little wrong.” – Carl Richards Carl Richards is one of my favorite finance writers. His message is always clear and easy to understand. He doesn’t try to confuse people or use scare tactics. The drawings he puts…
Buffett’s Performance by Decade
I ran some numbers on Warren Buffett’s performance for a post this week (see Two Finance Phrases I Could Do Without) which led me to run some different calculations on Berkshire Hathaway’s returns over the years. I have never seen Buffett’s performance broken out by decade. These are the annual returns against the S&P 500…
Competing Ideologies
One of the most difficult aspects of investing is that to create a successful investment process you have to get used to the fact that you’re bound to have competing ideologies at times depending on where we are in the investment cycle. Take buy and hold as an example. I like to say that any…
Two Finance Phrases I Could Do Without
There are many market analogies and cliches that can actually be useful, but there are plenty that are useless or could use some context. Here are two phrases I hear all the time that I could do without. “The easy money has been made.” The Warren Buffett Way by Robert Hagstrom was published in 1994….
Bonds Are Supposed to be Boring
Earlier this week I posted a handful of graphs that showed rolling returns for the stock market over various time frames. The point was to show how much variation in performance there’s been historically over shorter time frames compared with a much narrower range in long-term returns. A few people asked me to show similar charts…
Investor Transcripts Released
Earlier this month the Federal Reserve released the complete transcripts of all 11 policy-making meetings that took place in 2009. The financial media dissected every line item of the nearly 2,000 pages from these meetings. Investors and economists eat this stuff up because you get to see what Ben Bernanke, Janet Yellen and others were…
What Constitutes Long-Term in the Stock Market?
In a research note late last year, AQR’s Cliff Asness described what long-term means when it comes to the markets (emphasis mine): Basically, we know a lot more about volatility than the level of returns over the short term (and remember five years is still pretty short-term). I think we all know this already, and…
