Beyond the bull?

I was born in 1982. The year Michael Jackson released Thriller and E.T phoned home. The U.S. was in the midst of a deep recession, the second since 1980, with unemployment above 10%. 10-year Treasuries started the year at ~15%. Inflation, trending down, had peaked at close to 15% in 1980. U.S. stocks were trading […]

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How much risk?

How much of your retirement portfolio should be invested in risky assets? This is a key question. The mix of risky vs. risk-free assets is one of the most critical determinants of long-term returns (as is your ability to stay the course). Landing on this requires considering a few key things: 1) Human capital: how

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Four Pillars, part 5

We’ve covered Bill Bernstein’s Four Pillars. Now, let’s put them together. A few things to keep in mind:1) The future is uncertain – there are no sure things in investing (or life).2) To have a chance of earning high returns, you’ll have to take large risks.3) There are no perfect portfolios – only reasonable ones

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Four Pillars, part 4

You understand investing theory, you’ve studied financial history, and you’re aware of psychological pitfalls. Now the last hurdle: the investing industry. Although improved over the last two decades (since the first edition of Four Pillars in 2002), it can still be a minefield for the unaware and the trusting. Understanding and navigating the investing industry

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Four Pillars, part 3

“No matter how hard we try, we’re all hopelessly human.” Understanding financial theory and history isn’t enough; we must also overcome our own psychology. The traits that allowed our species to survive for hundreds of thousands of years are not necessarily well suited to long-term saving and investing. Investing is not a race won by

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