Vanguard has a timely reminder for investors – “cost is the new performance”.¹ We’ve entered a new era in the asset management business. The era of low fees. We now [ … ]
Category: Investing Basics
Assessing the Utility of Wall Street’s Annual Forecasts
It’s that time of year when everyone starts preparing for the New Year and Wall Street makes its 2016 predictions. I’ll get right to the point here – these annual predictions [ … ]
What is Portfolio “Risk”?
The idea of risk is a rather confusing and nebulous concept in modern finance. The traditional textbook definition of “risk” is standard deviation or volatility. This is convenient for academic purposes because [ … ]
What is Countercyclical Indexing?
We founded the concept of Countercyclical Indexing by answering some simple questions: Is a “balanced index” like a 60/40 stock/bond portfolio actually balanced? Does it make sense to rebalance back [ … ]
Problems with the Short-Term
Earlier this year I spoke about the problem of “the long-term”. This is the tendency for modern finance to emphasize a long-term view due to the fact that assets tend [ … ]
What is Asset Liability Matching?
I’ve previously described how good financial planning and asset allocation is a “temporal conundrum”. More specifically, our liabilities tend to have fixed temporal constraints. You pay a monthly credit card [ … ]
Indexing Really is the Future of Investing
John Bogle presented at this year’s Grant’s Spring Conference and made the argument for indexing as the way forward for investors. You can find his presentation slides here. Jim Grant [ … ]
Someone is Always Outperforming Your Portfolio
I have some bad news for you. Someone, somewhere has a portfolio that is doing better than yours is. It might be Warren Buffett or your neighbor or your worst [ … ]
Problems with “The Long-Term”
John Maynard Keynes once famously said “In the long-run we are all dead”. But the full quote doesn’t often get hashed out. Keynes said: “But this long run is a [ … ]