Market Forecasts are not useful
In order to forecast the future movements of an equity market you need to know several things, but I want to keep this discussion as simple as I can. Perhaps…
Investments, Retirement Planning, Wealth Management
The Market is Forward Looking
As a Professor of Operations Management I am often reminded of the huge contribution of Andray Markov. Markov was a Russian mathematician who dedicated most of his professional life to…
This Time is ALWAYS Different
The US stock market can be viewed through the lens of the S&P 500 index, even though this omits thousands of smaller companies and stocks. We will use it here…
The Market is Smarter than You Are
Let me approach this one from two different angles. Point number 1: People who predict the market for a living are bad at it. Point number 2: There are a…
The 85% Fallacy
I frequently run across “advice” from financial planners, and salesmen who focus on mutual funds, annuities and similar items that suggest that retirees need 80-85% of their pre-retirement income to…
The Four Letter Work is R-I-S-K
It seems fair to say that the biggest single topic in the financial media related to investment management for the doit yourself investor is RISK. The Risk of outliving your…
A Simple Depiction of Compounding
It has often been reported that Albert Einstein once claimed that “Compound interest is the eighth wonder of the world,” or “compound interest is the most powerful force in the…
They’re Coming for Your Retirement Account!!!
The alarmist financial “News” voices are up in arms screaming that “the government is going to eliminate 401K accounts.” Aside from the fact that this is political suicide for anyone…
The Good Old Days of Pension Security
There is a widely held believe belief along the lines of, “Everyone used to have a private pension. The golden years were secured by a monthly check that allowed retirees…
We all hate/love/don’t understand Annuities
A famous research paper, written in 1965 (Yaari, 65) argued that rational individuals should convert all of their retirement wealth to an annuity at the point of retirement. The underlying…