Monthly Archives: August 2013

Look down the trail

  There’s one more thing about riding a bike that can be counter-intuitive. You have to look down the trail, not right in front of your bike, to hold a good line. If you start staring at your front wheel, worrying about what rocks may be directly in front of you, you’ll be all over […]

Posted in investing, markets, retirement | Comments closed

Your asset allocation is wrong (and so is everyone else’s. )

The division of assets within an investor’s portfolio is generally accepted to be one of the most important decisions to be made.  Widely accepted academic research demonstrates that approximately 90% of long-term investment returns can be traced back to asset allocation. From the highest level, asset allocation is simple.  How much of your portfolio should […]

Posted in behavioral finance, investing | Comments closed

Take your ball and go home

In the last decade market volatility has set investors on edge.  Daily swings of two to three percent in major markets suddenly seem commonplace.  Their frequency makes them only more exhausting. Investors are leery of Wall Street, overwhelmed by news of the next Ponzi scheme, private investments falling apart, and unsure what to think about […]

Posted in investing, markets | Leave a comment

Why I won’t stop talking about passive investing

Josh (@reformedbroker)  has a great piece up from this weekend: “Memo to the Passive Investing Taliban.”  In it, he’s essentially asking those of us in the passive investing camp to calm down, or at least quiet down. Not everyone is going to be “turned” to the side preaching low cost, tax efficient passive investing through […]

Posted in investing | Comments closed

Gaps in the argument for actively managed funds

A piece appeared in the Financial Times this weekend titled “Passive parasites do not cure all financial ills.”  Written by David Smith, a mutual fund manager in the UK, the piece make two common attacks on passive investment philosophies. 1) The “Logical Extension” argument.  This typically centers around a statement that the markets don’t work if everyone […]

Posted in investing, markets | Comments closed

Indexing in an Irrational Market

People assert that one of the core assumptions behind index/passive investing is that markets are rational and therefore stock prices are always accurate, reflecting all publicly (and sometimes privately) available information about a company’s prospects.  Therefore, attempts to “outsmart” the market will fail. However, it is clear that markets are not purely rational.  We cannot […]

Posted in investing, markets | Comments closed