“Investors are always fighting the last war, when in fact all crises are different.” – Harry Markowitz People have a hard time understanding risk. We only seem to worry about something after it happens instead of preparing for inevitable problems ahead of time. This comes from last week’s Wall Street Journal after the earthquake in…

“We display risk-aversion when we are offered a choice in one setting and then turn into risk-seekers when we are offered the same choice in a different setting. We tend to ignore the common components of a problem and concentrate on each part in isolation.” – Peter Bernstein Let’s say you were given fifty-fifty odds…

Morningstar had an interesting piece out this week about the alternative mutual fund universe. While Morningstar studies have shown that the most dependable predictor of future fund performance is low expenses, investors in this universe of funds aren’t following that advice: From 2011 to 2013, only 36% of the net $58 billion that has flowed…

“Risk control is the best route to loss avoidance. Risk avoidance, on the other hand, is likely to lead to return avoidance as well.” – Howard Marks The investment fee wars continue to heat up as scale becomes more important than the actual size of the expenses. Here’s the latest from Investment News: TD Ameritrade…

“A bull market is like sex. It feels best just before it ends.” – Barton Biggs Here’s how legendary investor John Templeton once described bull markets: Bull markets are born on pessimism, grow on skepticism, mature on optimism, and die on euphoria. And this is how Howard Marks defines the three stages of a bull…

“A personal finance crisis is almost inevitable unless you address the truly important tasks in your life before they become urgent.” – Carl Richards Here’s another one to add to the ever-growing list of scary household saving stats courtesy of Businessweek: Just 45 percent of upper-middle-class households (income from $75,000 to $99,999) saved anything in…

“One lesson from 2008 is that if it’s very complicated and you don’t understand it, maybe you shouldn’t buy it.” – Harry Markowitz It appears some people didn’t learn their lesson from the CDO debacle of the last financial crisis. This comes from a story in last week’s Wall Street Journal on a new fixed…

“If you think the market’s “too high” wait ’til you see it 20 years from now.” – Nick Murray

Interest rate risk has been THE big worry for bond investors for a number of years now.  It seems that everyone has been predicting a rise in interest rates, but it just hasn’t happened quite yet. This has caused many investors to shift their bond allocation in anticipation of a rate increase and price losses in…

One of the most difficult challenges of transitioning to retirement from the working world is a complete change in mindset with regards to an investment portfolio. You go from being a saver to a spender. There’s no future income or nearly as much time to soften the blow from bear markets. Growth is still necessary but you…