The selloff was mostly driven by concerns about the spread of the coronavirus outside of China. Although the World Health Organization (WHO) said that it was not yet a pandemic, it increased its risk assessment from ‘high’ to ‘very high.’ Although the bond market received less media attention, the results were equally dramatic. For reference, the yield on the 10-year US Treasury on January 31st was 1.51 percent. On Friday,… Read More
Over the years, most of the Daily Insights that I’ve written are about investing, financial planning or, less frequently, economics. I don’t think I’ve ever written about the people hire financial advisors – mostly, because I can’t come up with much of an answer other than a generic statement about ‘peace of mind’ or describe why my most recent client hired me. Now, though, I’ll have a better answer, thanks… Read More
The big news on Friday was an agreement between The White House and Congressional leaders to reopen the government until mid-February to allow border negotiations to continue. Whatever you feel about President Trump, Speaker Pelosi, the shut-down, ‘The Wall,’ or any other hot-button that’s sure to upset someone, there is a salient, non-partisan lesson that’s worth noting: the importance of either maintaining an emergency fund or sufficient liquidity. Although financial… Read More
Normally when we talk about the perils of performance chasing, we are referring to investors buying into asset classes that have done well in the recent past and avoiding those that haven’t fared as well. Right now, for example, investors want to own US large cap stocks because the S&P 500 is up 13.74 percent over the five years ending Oct. 5, 2015 and want to avoid emerging market stocks… Read More
In the past two weeks, I’ve written primers on two of the strategies that we use, over-weighting to small cap stocks and investing in cheap, value stocks. One of the Portfolio Managers here at Acropolis correctly reminded me that all of the best strategy in the world can be undone with poor investor behavior, so I thought I would try and put some numbers on that idea. To demonstrate how… Read More
Any sensible person knows that you have to save money for the future. At the very least, you need to have money set aside for the so-called ‘rainy-day.’ If you don’t have a cushion, the consequence of a negative surprise can be a lot worse than if you have an emergency fund set aside. Do money and happiness go together? Can saving actually make you happier? I wouldn’t have thought… Read More
The 2004 book, The Wisdom of Crowds, by James Surowiecki, starts with a vignette about the famous British scientist Francis Galton set in 1906. In the story, Galton travels to the county fair and finds a weight judging competition, where the crowd could wager on how much a fat ox weighed. For a sixpence, people could write down their wager and the closest person one a prize (but not the… Read More
