The debate between active investment strategies and passive investment strategies has been going on since John Bogle, founder of the Vanguard Funds, introduced the first S&P 500 index fund in 1975. Most recently the California Public Employee’s Retirement System (CalPERS), the largest pension fund in the world, has decided to re-examine its active management strategies [...]

When helping people with Financial Life Planning we often find the conversation turning to the children. Successful parents seem to have a lot of worries. They worry about raising children who do not value work, how much to pay for their children’s college education, whether or not to help children buy their first house and [...]

“What do you consider to be the long-term?” This is the most common questions when we suggest people should be long-term investors. The real answer is dependent on each individual situation. For example, an absolute need for money to fund your child’s college education over the next four years might make long-term 5 years for [...]

When people think about financial planning often the first thing that comes to mind is investments. Then they may think about saving for education and retirement and if they go much deeper they may think about cash flow and debt management. These are all important components of financial planning but they miss the most valuable [...]

What can lab rats teach us about investing? – Actually, a lot. A team a researchers at Yale created a maze that randomly dropped food pellets in two opposing sides. Only the game was rigged so that 60% of the time the pellets would end up on one side and 40% on the other side. [...]

The movement of stock prices is random. In 1973, Burton Malkiel, a Princeton economist, published one of the most influential books about the stock market titled, “A Random Walk Down Wall Street”. Today you can buy the 10th edition. Malkiel points out that stock prices are indeed random and no amount or style of analysis [...]

This morning while listening to CNBC I paid attention to the ads that promise the best information, charts and trading platform for “active traders”. It reminded me of the pictures I’ve seen of the long lines of people heading out to the Alaska gold fields laden with the equipment they would need not only to [...]

Financial Life Planning and investments are all about making decisions. Ever since Daniel Kahneman and Amos Tversky introduced us to the idea that we make predictable mental errors it seems researchers have been tripping over themselves to find new ways that we make “irrational” decisions. Predicable concerns about making irrational Financial Life Planning and investment [...]

The wild swings in the equity markets and the general downward trend over the past several months makes investing in equities a scary propositon these days. Behavioral  scientists tell us that the pain of a loss is twice as great as the joy of a gain. So, our natural reaction is to pull out of [...]

“They had worked up a list of companies that they suspected would suffer from a spooked market. Ford, HCA, Energy stocks. As the trader watched his screens, he saw that those companies’ bond prices were trading 8 percent to 10 percent below their expected range. It didn’t make any sense: Ford’s finances hadn’t changed over [...]