“The best investors make a habit of putting procedures in place, in advance, that help inhibit the hot reactions of the emotional brain.” – Jason Zweig Neuroeconomics is the study of how we make decisions using brain activity (neuroscience), economics and psychology. Think of it as the behavioral finance of our intuition and reactions. In…

“If you understand that the role of fixed income is to be the boring part of your portfolio, then you’re buying short- to intermediate-term bonds and you’re holding on to them. That’s always been the role of fixed income and that’ll always be the role of fixed income.” – Carl Richards Bond investors have had…

“Whether you take a risk depends not just on the probability that you are right but also on the consequences if you are wrong.” – Peter Bernstein Common sense reader mailbag: You write a lot about investing in index funds. Are these truly the best investment option or are there alternatives that I should be…

Goals-based financial planning within your investment plan is a topic I have been wanting to write about for a while now. It’s very difficult to come up with a comprehensive investment plan if you don’t know why you are saving or what your long-term goals are.

“The business schools reward difficult complex behavior more than simple behavior, but simple behavior is more effective.” – Warren Buffett Just a simple post today.  These are my common sense investment rules. Common Sense Rules That Will Ruin Your Investment Portfolio 1. Trying to consistently “beat the market” 2. Trying to forecast the market in…

“What we learn from history is that we don’t learn from history.” – Benjamin Disraeli The Wall Street Journal ran an article last week chronicling the stories of young buyers who are stepping up their investments in real estate by, “skipping the starter home and betting heavily on high-end real estate.” We’ve seen this movie…

“Far more money has been lost by investors preparing for corrections, or trying to anticipate corrections, than has been lost in corrections themselves.  I can’t recall ever once having seen the name of a market timer on Forbes’ annual list of the richest people in the world.  If it were truly possible to predict corrections,…

“There’s no trick to being a humorist when you have the whole government working for you.” – Will Rogers Many of us take great joy in pointing out the ineptitude of the government. No matter which way you lean politically, you probably wouldn’t get too many arguments if you were to claim that the government…

“Instead of concentrating on the central issue of creating sensible long-term asset-allocation targets, investors too frequently focus on the unproductive diversions of security selection and market timing.” – David Swensen “One of the things you learn about asset allocation is that the unemotional defeat the emotional over time by fading their highs and lows, their…

Take a look at this really great new tool from the New York Times (click to enlarge): Like most financial calculators, you enter in your basic information (salary, % saved, salary increase, expected returns and time horizon). But, this one has the added benefit of showing you how your results would be different if you…