“Most lack the courage and stamina to stand apart from the herd and tolerate short-term underperformance to reap long-term rewards.” - Seth Klarman Ask anyone off the street to name a great investor and chances are you'll hear Warren Buffett---often held up as the paragon of investing success. But what if I told you he spent more time underperforming the... Read More
How ‘Withdrawal Order’ Can Increase Wealth and Reduce Taxes
Last time we looked at how to generate a paycheck from your investment accounts. Getting money out of your portfolio is important, but just as important is knowing from which account to pull the funds as most retirees are going to have some mix of taxable, tax-deferred (IRA, 401(k), etc.), and tax-free (Roth IRA) accounts at retirement. The order in... Read More
How to Generate a Paycheck in Retirement
For many retiring or simply leaving their jobs to pursue other opportunities, one of their primary questions is: how do I get a paycheck now that it’s not coming from my employer? I still need to pay bills, buy groceries, etc., so how do I fund my bank account? For most, it means a transition from accumulating assets (contributing to the... Read More
What are Interest Rates Forecasting for Stocks?
What are interest rates telling us about the current state of the economy? And, more importantly for investors, what are they telling us about the markets? A few weeks back Ben Carlson had a good post addressing the first question. He asks what interest rates (specifically the spread between 2-year Treasury yields and 10-year Treasury yields) are telling us about... Read More
Stick with It: The Key to Factor Investing (Or Any Investing Strategy)
In a series of articles about factor investing we’ve defined what we mean by factor investing, we listed the factors and examined their performance, and last time we examined how a strategy can still work when everyone knows about it. The next question we get is, if a strategy works, why doesn’t everyone do it? Why doesn’t everyone earn a... Read More
Taking Action Now Costs Less Than Being Forced To Later [Announcing an Upcoming Retirement Transition Seminar]
"Avoiding a problem with foresight and good design is a cheap, highly leveraged way to do your work. Extinguishing a problem before it gets expensive and difficult is almost as good, and far better than paying a premium when there's an emergency. Fretting about an impending problem, worrying about it, imagining the implications of it... all of this is worthless.... Read More
Factor Investing: No Secret, So Will It Continue to Work?
“More investors don't copy our model because our model is too simple. Most people believe you can't be an expert if it's too simple." ~Charlie Munger when asked why more investors hadn't copied Berkshire Hathaway's approach to investing* Value and other forms of factor investing aren’t new. They’ve been around for a while now and are widely documented in the... Read More
Getting Comfortable with Being Uncomfortable
Investing well, like any significant endeavor, requires some level of pain to succeed. In a recent article Brad Stulberg, a writer for Outside Magazine and Runner’s World shared the advice he received from his marathon coach. To succeed as a marathoner, he “would need to learn how to be comfortable with being uncomfortable.” Stulberg says he, “didn’t know it at... Read More
An Introduction to Factor Investing: Part II
Last time we reviewed the advantages of index funds and introduced the concept that different stocks may have different attributes (called “factors”) which lead to different returns. This time, we will specify the four primary factors identified in the research and look at the differences they make to returns. Then we will discuss some drawbacks or things to be aware of when... Read More
Q2 Investment Update: When Stocks Go Nowhere
Despite the shock Britain's historic vote to leave the EU delivered to the financial markets, the second quarter saw most asset classes deliver positive returns. International stocks were the only major asset class down in the quarter. The best performing asset classes were long-term bonds, REITs, and Commodities. Year to date REITs, Commodities, and Emerging markets lead the way. The... Read More