Corrections Happen

If you enjoy fine literature, we recommend all of Warren Buffett’s annual Berkshire Hathaway shareholder letters. His 2016 letter was no exception, including this powerful insight about market downturns: “During such scary periods, you should never forget two things: First, widespread fear is your friend as an investor, because it serves up bargain purchases. Second, personal fear is your enemy.”

Who's Looking Out for You?

They are probably a close friend, a member of your church or club, a neighbor, or even a relative. You feel comfortable taking their advice because they seem more knowledgeable than you and they are “such a nice person.” Who can blame you for feeling that your financial advisor (an undefined and wholly unregulated term) is a trusted member of your “team” of counselors?

The Best Intentions

At a previous employer, we were committed to the phrase “trust in the good intentions of others.”  When I used these words recently in a conversation others at the table looked at me as if I was from Mars.  “C’mon,” said an older gentlemen, “you don’t really believe that, do you?’ After thinking about it, I had to admit that I do believe it.  Should I?

The Story of Indexing

Since nearly every media outlet on the planet reported the news, you probably already know that the Dow Jones Industrial Average topped 20,000 for the first time on January 25, 2017. But when a popular index like the Dow is on a tear, up or down, what does it really mean to you and your investments? Let's explore some of the ins and outs of indexes and the index funds that track them. 

Power of Portfolio Diversity

Before the 1960s, very few people invested (about 11% of the population in 1959). Most of those speculated in the stock market. Buying stocks was and is more like gambling than real investing, as individual companies can – and have – gone bankrupt; losing stockholders everything they invested.

Harvesting Portfolio Income

I once worked with a lawyer who wanted me to do a calculation for his clients that would show that their retirement income would never run out. A guarantee (the song "Wouldn’t It Be Nice” came to mind) When I told him I couldn’t do that, our relationship ended.  Abruptly.  He said that he found another financial planner who informed him (the attorney) that he had software that would make such a guarantee.

Cerebral Whiplash

For many years, Scott Burns wrote a nationally syndicated financial column for the Dallas Morning News. Scott retired at the end of January, and his column was turned over to Professor Laurence Kotlikoff, an economist at Boston University. At first glance, the change seemed reasonable...


How the Markets Work for You

Upon observing a pencil, it is tempting to think a single individual could easily make one. After all, it is made up of common items such as wood, paint, graphite, metal, and a rubber eraser. By delving deeper into how these seemingly ordinary components are produced, however, we begin to understand the extraordinary backstory of their synthesis.

Being Actively Passive

With over $4 trillion currently invested in “index-style” passive mutual funds, it appears that investors are beginning to realize that active investing doesn’t work well enough to justify its costs. But, how passive should you be?

Is Being Passive Perilous?

Real investing requires investors to adopt a patient, long-term approach to capturing the market’s expected returns. In industry parlance, some have categorized this approach as “passive,” versus active attempts to beat the market. We prefer to think of it as science-based or evidence-based investing. 

Making Money Even When Losing It

So much of investing is beyond our control (picking stock prices, timing market movements and so on), it’s nice to know that there are still a number of “power tools” we can employ to potentially enhance your bottom line. Tax-loss harvesting is one such instrument … although the tool analogy holds true in a couple of other ways: It’s best used skillfully, and only when it is the right tool for the task. 

Millennials: Two Words, Four Letter

Today’s investment choices are huge, too huge. Which means that, in addition to the difficulty of saving, you have the confusion of too many confusing choices. Let me simply the process ofbeginning to build the wealth you’ll need to retire comfortably. 

Ten Time Tested Money Making Tips

Many individual investors just play the market, and their results reflect it. If you are ready to stop playing and maximize your returns, then there are ten key things you need to understand, accept and follow to become a real investor.

Proper Portfolio Parenting

In the face of political drama at home and abroad, it’s certainly been a summer for trying our patience, hasn’t it? For anyone who has ever been a parent or a child – that is, for everyone – there are several comparisons we can draw between good parenting and good wealth management. For both, plenty of patience is one of the most important qualities to embrace.

The Downside of Plain Indexing

Index funds are an innovative solution for investors that provide diversified investments at low fees. On any given day, an investor can observe the performance of indices from providers such as MSCI, S&P, or Russell —and that means it’s easy to monitor whether or not an index fund manager replicated the index’s performance (gross of fees and expenses). However, an index fund manager’s strict adherence to an index comes at a cost in the form of reduced discretion around trading.

Do College Investing Homework

To help reduce the expected costs of funding future college expenses, parents can invest in assets that are expected to grow their savings at a rate of return that outpaces inflation. By doing this, college expenses may ultimately be funded with fewer dollars saved. Because these higher rates of return come with the risk of capital loss, this approach should make use of a robust risk management framework.

Real Estate Investing Realities

Just as the natural world around us comes from the elements found in the periodic table of elements, capital markets are made up of asset classes, broadly organized into stocks, bonds, and hard assets like commodities and real estate. As elemental as asset classes are to investing, it often makes sense to include some real estate investments in your globally diversified portfolio

Avoid Wall Street's Word Games

Words matter.  At least that’s what I have always thought.  However, Wall Street plays word games that would make any politician proud.  The Wall Street product pushers and their minions play with the language so well that it’s virtually impossible for mere mortals to understand what they are being sold.

'Tis the Season for Predictions

In the coming weeks, investors are likely to be bombarded with predictions about what the future, and specifically the next year, may hold for their portfolios. These outlooks are typically accompanied by recommended investment strategies and actions that are aimed at trying to avoid the next crisis or missing out on the next “great” opportunity.