If there were a contest for the most frequent of Frequently Asked Questions we’ve been hearing lately, this one would be the easy winner: “Why is my globally diversified portfolio underperforming a simple allocation to the S&P 500 Index?”
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As Dimensional’s David Booth has said: “Where people get killed is getting in and out of investments. They get halfway into something, lose confidence, and then try something else. It’s important to have a philosophy.”
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We tend to be led off-course from our happily ever after outcomes by fantastical “folklore” that we continue to tell ourselves long after the evidence has informed us otherwise.
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Congratulations, you’ve received a chunk of change! Maybe it’s an inheritance, a signing bonus, or similar windfall – or maybe you’ve been sitting on a stash of cash for a while. What do you do next?
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The result of this extensive groundwork is an investment strategy for patient investors who are seeking clarity, understanding and cost control … elegant simplicity.
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I love free or low-cost service as much as the next guy. But, when it comes to financial services, if it’s “free”, buyer beware.
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Learn how to choose between 529 plans based on what makes sense for you and your family.
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How do you go about comparing and contrasting the 80+ 529 plans available to you?
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Whether they represent a past mistake, bad luck, or a choice that made perfect sense at the time but no longer does, you are subject to sunken cost fallacy when a holding is no longer serving for your current goals. Learn how to avoid this trap.
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Are there signs to tell us if a market correction is imminent, or are they more likely false prophets? Either way, how is an investor advised to respond to such forecasts?
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I’m no more immune to confirmation bias than the next guy. For example, when I left my job at Dell several years ago, I realized I could finally buy an Apple. But, darn the luck, we already had a perfectly good PC at home.
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As if the market is also rejoicing at the arrival of fair weather, most asset classes ended this second quarter on a high note. It’s gratifying to see the improved numbers in our financial statements.
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In past posts, we’ve talked about building your portfolio according to the body of robust academic evidence on how different asset classes are expected to deliver different long-term returns. But what is this “tactical asset management”?
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Today, we wanted to follow up with a closer look at effective diversification. Rather than reinvent the wheel, we’ll refer you to an excellent overview that already exists in the form of CBS MoneyWatch columnist Larry Swedroe’s post, “How to diversify your investments.”
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Life is often imperfect once reality gets in the way. In this case, a disadvantage of household portfolio management is, well, it’s harder to manage
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If trading were free, you could precisely rebalance your portfolio daily. In reality, trading incurs transaction fees as well as potential tax liabilities. To strike a happy compromise, you want to have guidelines in place for when and how to rebalance.
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When we create your portfolio, we do so according to particular percentages defined in your personalized Investment Policy Statement (IPS).
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Carl Richards of BehaviorGap.com posted an interesting Tweet recently: “You don’t hire a real financial advisor because you aren’t smart enough. You hire one because you aren’t an objective 3rd party.”
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When is the last time your portfolio had a thorough spring cleaning? Find out the ways to best accomplish this task.
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How survivorship bias can turn a good study bad.
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