Confirmation errors mislead the proverbial dog that believes his bark makes UPS trucks go away. The dog can test his belief by seeking disconfirming evidence. How about not barking next time the UPS truck is in the driveway? If the truck stays in the driveway, that would be confirming evidence; however, if the truck leaves, […]
Irrational or Motivated? A Fresh Look at Confirmation Bias Read More »
U.S. gross domestic product (GDP) — a key economic measure capturing the total value of goods and services produced — was recently announced at an estimated growth rate of 3.0% for the second quarter. This follows a -0.5% decline in the prior quarter, which was the first time quarterly U.S. GDP shrank in three years.
What’s in a GDP Number? Read More »
An elderly couple moving to an assisted living apartment calls their son in another state for help moving their belongings. A widow in her 90s finds it difficult to clean her home, yet refuses to hire help. These people are not wealthy, but neither are they poor. Each has more than enough to pay a
Don’t Leave the Best for Last: Moving from Accumulation to Decumulation Read More »
In a volatile year for U.S. stocks, the overall U.S. bond market has maintained a positive year-to-date total return throughout 2025. For investors allocating to balanced portfolios of both asset classes, bonds are likely to have played a useful role, sometimes helping offset periods of disappointing stock returns and reducing total portfolio volatility. However, this
Three Things Investors Should Know About Today’s Bond Market Read More »
A recent study from Morningstar’s Jeff Ptak estimates that the average U.S. fund investor held about 82% of their equity portfolios in U.S. stocks as of late 2024.1 Although the U.S. market has undoubtedly grown relative to non-U.S. stocks over the last 15 to 20 years (as shown in Figure 1), 82% is still far
Deglobalization, Currency Movements & the Case for Global Diversification Read More »
My daughter’s bus leaves her stop at 7:25 a.m. To get there with ample time, I know I need to leave our house at 7:15. Otherwise, I risk needing to text the other bus stop parents something along the lines of, “Hershfield family coming in hot! Please hold the bus for us!” which immediately prompts
The Headwinds vs. Tailwinds Asymmetry Read More »
Imagine you’ve been granted a choice from a magic (retirement) genie. He asks if you’d rather have $100K at the start of your retirement or $500 per month for the duration of your retirement. Which would you choose? Or, what if the choice was $200K versus $1K per month? Which option seems more adequate —
The Illusion of Wealth Read More »
Many consider Warren Buffett to be the most famous value investor the world has ever known. This can be debated, but with an investment career that spans nearly seven decades, he has undeniably learned a thing or two about markets. How else would you get a nickname like the Oracle of Omaha? An enduring and
Lessons From the Oracle Read More »
Two years ago, the concentration of the U.S. stock market in its largest companies looked high compared to recent history. Today, some might say market concentration appears really high. At the end of 2024, the 10 largest companies in the S&P 500® Index made up 37.3% of the index by market capitalization. This means that
Heavy Weights: The Real Story Behind Current Market Concentration Read More »
Consider your answer to the following question: “Suppose you are given an opportunity to replace your current investment portfolio with a new portfolio. The new portfolio has a 50-50 chance to increase by 50% your standard of living during your lifetime. However, the new portfolio also has a 50-50 chance to decrease your standard of
Investment Risk, Investor Risk Tolerance and Behavioral Goals-Based Portfolios Read More »