Professionals may follow the more statistically accurate Standard & Poor 500 to measure the stock market but the general public still stands with the Dow Jones Industrial Average. A railroad dominated Dow was created in 1884 but it soon gave way to an all Industrial Index of 12 stocks in 1896. The chart below shows […]
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For Millennials the Struggle is Real…
When you were born may impact the success of your retirement savings more than you realize. Each of us follows a financial trajectory through life that is largely dependent on prevailing economic, political, demographic and social conditions. But does the generation we belong to possess different characteristics of work ethic and savings habits than other […]
Snow-capped Mountains, Salt, and Lithium…
There are a few things to know about landing in La Paz, Bolivia, as my family and I did recently. One is that La Paz is the highest capital in the world, so when you land at the airport at 13,300 feet above sea level, you feel it. Breathing is harder. The air is so […]
The Skinny on the Big, Fat Trade Dispute…
The current trade debate began back in January when the Trump administration, fed up with what it viewed as unfair trade practices, began threatening to levy tariffs against China. These threats became real in early July when U.S. slapped levies on $34 billion worth of Chinese goods. China responded by imposing tariffs on a similar […]
The 2-Minute Thought: How Big Can a Company Get?
A recent column in The Economist suggested that Apple is testing the natural limits of company size. It’s not a new idea. It seems natural to expect that something would happen eventually after a company gets so big and dominant – something like market saturation, competition, backlash, missteps, or product obsolescence. Every age has had its […]
The 2-Minute Thought: Mid-Year Market Review
The pink chart below from last Friday’s Financial Times tells us a lot about where we are in markets now: Source: Financial Times The indomitable FANG or FAANG stocks remain indomitable (that’s Facebook, Apple, Netflix, Google – plus Amazon if you do the double A). Though there was a brief moment of doubt earlier in […]
The 2-Minute Thought: When to Heed Advice from Others
In her 2013 book, Sidetracked: Why Our Decisions Get Derailed, and How We Can Stick to the Plan, Harvard Business School professor Francesca Gino describes an experiment she did with Don Moore, a colleague at the University of California, Berkeley. In the study, participants were shown pictures of people and asked to estimate their weight. […]
Some Things We Have Run Across Recently…
The demilitarized zone between North and South Korea has always interested me, not because of the military standoff but because of its ecological history and now, its economic development. The DMZ is not a fence or a Berlin Wall. It is an enormous swath of land, 528 square miles in size. Because there has been […]
Investing is Just Like Gambling With One Big Exception…
If you play long enough in Las Vegas you will eventually lose. The odds are stacked against you. In the stock market the opposite is true. Stock prices are based on corporate earnings and over time corporate earnings go up. Historically they have increased approximately 7% per year over ten-year or more periods. The amount […]
Why we Make Suboptimal Decisions…
In ice hockey, if you’re down by one goal and the clock is ticking down, should you take the chance of pulling your goalie to get a sixth attacker on the ice and increase your chances of scoring? And if you decide to go for it, when is the optimal time to pull the goalie? […]
Go Ahead and Spend a Little!…
Retirement planning is difficult for a very simple reason. In most cases, it requires deferring consumption today in order to fund a goal sometime in the future. This effort requires a well developed sense of self-control. Self-control comes more easily to some people than others, but for most it is emotionally difficult. A wide range […]
The 2-Minute Thought: On Investment Errors – Part II
When do you know your investment decision was wrong? That was the topic of my post last week. I wrote that you may not know if you are right or wrong at a given moment, but eventually you will — after enough time has passed. As part of my examination of our errors among the […]
