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 »
International Stocks vs. U.S. Stocks International stocks have not done well recently compared with U.S. stocks. The 2024 return of international stocks (as measured by the MSCI World ex USA Index) was just under 5%, lagging by nearly 20 percentage points the return of U.S. stocks (as measured by the MSCI USA Index). And the
International Stocks and Recency Bias Read More »
After a 26% total return from the S&P 500® Index in 2023, few predicted 2024 would deliver another big year of gains for U.S. stocks. But it did. Not only did the S&P 500 post a 25% return for the year, but the index reached 61 new all-time highs. Together, 2023 and 2024 form the
It’s Been a Whale of a Year Read More »
Consider the numerous decisions we face every day: what to eat for breakfast, what we should wear to work or a restaurant, who we should spend time with, and whether and what to watch on our screens after the day ends. Those are undoubtedly choices that could fall under the umbrella of “little decisions.” We
The Psychology of “Big” Life Decisions Read More »
Have you ever written down, at the start of a year, predictions for what will happen in the year ahead? For investors, taking note of your beliefs about the market or economy and then coming back later to inspect can be a good exercise in understanding the difficulties of forecasting. It’s a lesson we can
2024 Market Forecasters’ Report Card Read More »
The US presidential election has concluded, but uncertainty remains about what comes next. For those focused on market returns, it can be helpful to look at the historical success of markets across presidencies. It’s important for investors to remember that whether you are optimistic or pessimistic about the future state of the world, you should be
Election Results Shouldn’t Dictate Your Investments Read More »
I often note that the biggest risks in life are not in the stock market. If you want real risk, I say, get married. And if you want more risk, have children. People laugh because the point is obvious. Yet that point is regularly lost when we speak about financial well-being, neglecting life well-being. Financial
Life Well-Being as a Portfolio Read More »