Bloomsbury Associates
Blog posts from other publications
In the blog section we've brought together the most insightful, and sometimes provocative, articles from eminent publications including the Wall Street Journal, Economist and New York Times.
The topics span a range of issues from international monetary markets, trends in ethical and socially responsible investing, and perspectives on investor behaviour. We also explore more thoughtful issues such as the impact of personality and gender on attitudes to risk, and the economic theory that underpins our philosophy.
We've done the hard work identifying the 'must read' articles of the day, so you don't have to.
Our Balancing Act
HumbleDollar, 05/09/24
Striking a balance in life starts with identifying competing demands and understanding that there is no single solution for everyone. There are trade-offs for instance between spending today and saving for tomorrow, between work and leisure, between feeling constantly challenged and just wanting to smell the roses. This article suggests a holistic approach. Read more about our balancing act
Yes, you CAN control your emotions - with these techniques
Big Think, 30/07/24
At times of volatility in markets, your stress levels can go through the roof. But there are exercises you can do to moderate your feelings and resist acting on them without denying how you feel. This video examines the role of metacognition in developing awareness of your emotional responses. Read more about techniques to control your emotions
At The Money: Behavior Beats Intelligence
The Big Picture, 24/07/24
Finance types tend to focus on attributes like intelligence, math skills and computer programming. But it turns out financial success is less about knowledge and more dependent on how you behave and make decisions than raw intelligence. How you behave with money matters more than what you know about money. Read more about how behavior beats intelligence
11 Tips for Using Philanthropic Stories to Enhance Business Growth
Rolling Stone, 19/07/24
There are many ways for businesses to get involved in philanthropy. But while the main motivation behind doing good in their community may not have anything to do with scaling their business, telling stories of impact and philanthropy can be a great strategy for boosting business growth. Read more about using philanthropic stories to enhance business growth
Wealth managers try to avoid 'conversational cul de sacs' on philanthropy
FTAdviser, 17/07/24
UK wealth managers are often nervous about bringing up the topic of philanthropy as they fear putting clients in an awkward position. They worry about creating a conversational cul de sac, where for example they say 'are you interested in philanthropy', and the client says no. Read more about how wealth managers try to avoid 'conversational cul de sacs' on philanthropy
Next generation determined to make philanthropy more effective
PWM, 15/07/24
Millennials and Gen Z are keen to put their wealth to use and take a more hands-on approach to philanthropy than older generations. They have a much more active, entrepreneurial attitude to giving, with a focus on generating impact. Read more about next generation determined to make philanthropy more effective
A Balanced Portfolio Always Comes with Regrets
A Wealth of Common Sense, 14/07/24
Some investors regret missing out on the big gains while others experience more regret when they participate in big losses. Some people regret every time something goes wrong. A balanced portfolio is a simple way to minimize regret by spreading it around but it never goes away completely. Read more about how a balanced portfolio always comes with regrets
The Role of Behavioural Finance in Your Investment Decisions
TechBullion, 13/07/24
Investing can be challenging, especially when your emotions and biases get in the way. Behavioural finance helps you understand how your psychology affects your investment choices. By recognizing these influences, you can make smarter, more informed decisions. Read more about the role of behavioural finance in your investment decisions
At the Money: Changing Your Behavior For Better Investing
The Big Picture, 03/07/24
If you could change only one thing that would help your investing, what should it be? Your own behavior. When it comes to investing, we are our own worst enemies. Why is this, and what can we do to avoid this fate? This podcast examines how to manage your emotions when investing. Read more about changing your behavior for better investing
Uncertainty is underrated
Yahoo! Finance, 24/06/24
All investments involve risk - there is no guarantee of success. Investors can be rewarded for taking on the risk of not knowing exactly how things will play out. If there was no uncertainty, returns would be predictable and there would be no difference between putting your money in a savings account and investing it in the stock market. Read more about why uncertainty is underrated
The psychology of goals
The Conversation, 12/06/24
Psychology studies show a consistent pattern of successful goal pursuit being linked to a feeling of wellbeing. Having time to work toward our goals is important. With this in mind, what is the best way to get things done – and how can we get better at achieving our goals, especially when we feel time poor? Read more about the psychology of goals
Why we fear uncertainty - and why we shouldn't
Vox, 18/02/24
One of the things that human beings seem to fear is uncertainty. Most of us like to know things, and when we don't know things, we get uncomfortable. And when we're forced to face the unknown, our response is often to retreat into old ideas and routines. Why is that? Read more about why we fear uncertainty - and why we shouldn't
The Paradox of Past Performance
Behavioural Investment, 10/10/23
Although we may not like to admit it, the past performance of an asset class or fund is likely to have an overwhelming influence on our decision making. There is probably no more prevalent nor puzzling paradox in investing – in order to enhance our returns we make decisions based on a measure that is likely to reduce them. Read more about the paradox of past performance
The Key To Making Good Financial Decisions - Connecting With Your 'Future Self'
Forbes, 04/06/23
In making big decisions, striking a balance isn't just about competing demands in your life today. It's also about where you are now and where you imagine yourself to be in the future. Engage with your 'future self' and think about how demands might change in time. Read more about connecting with your 'future self'
Recovering from a financial setback
Big Think, 23/03/23
A financial setback can feel like a deeply personal crisis or failure. This can cause a downward spiral that leads to decreased motivation, bad decision-making, and worsening financial performance in the future. But by building your psychological reserves and creating a plan, you can recover from financial stumbles. Read more about how to psychologically recover from a major financial setback
Habits vs. Goals
Farnam Street, 25/05/21
Once formed, habits operate automatically. Habits take otherwise difficult tasks - like saving money - and make them easy in practice. By switching our focus from achieving specific goals to creating positive long-term habits, we can make continuous improvement a way of life. Even if we backtrack sometimes, we're pointed in the right direction. Read more about habits vs. goals
Why Do We Chase Past Performance And What Can We Do About It?
Behavioural Investment, 21/01/20
We've all heard the message 'past performance is no guide to future results.' Still, we tend to chase last year's winners, in what is known as 'outcome bias': We assume that good results must be due to skill and will persist, and that poor results are a prelude to ongoing disappointment. Read more about why we chase past performance
How to stick to your financial New Year's resolution
CNET, 14/01/20
Having a plan in place and being realistic with your goals are both important contributors to success with New Year resolutions. But there's another frequently overlooked factor – and that is having someone to support you and keep you accountable. Find out the key elements of success. Read more about how to stick to your financial New Year's resolution
How to Overcome Your Brain's Fixation on Bad Things
Greater Good Magazine, 13/01/20
We tend to give greater weight to threats than opportunities. This dates back to when we were dodging wild beasts on the savannah. Modern media taps into this instinct and monetises it by harvesting our attention with negative news. This article suggests some ways of overcoming that pull. Read more about how to overcome your brain's fixation on bad things
Gradual Improvements Redux
The Irrelevant Investor, 08/01/20
Do you ever watch the financial news on TV and come away thinking that the reasons for getting out of the market seem endless? Bill Gates had an explanation for this: The news misleads you because gradual improvements in the world don't so easily fit into a headline. This article provides a different framework. Read more about gradual improvements redux
10 Things Investors Can Expect in 2020
A Wealth of Common Sense, 05/01/20
Heading into 2019, there was a lot of gloom about global markets after the worst year for equities in seven years. Now, everyone is speculating about 2020. Writer Ben Carlson says while there simply is no way to reduce uncertainty about the future, he is sure about 10 things that will happen this year. Read more about 10 things investors can expect in 2020
Five rules from psychology to help keep your new year's resolutions
The Conversation, 01/01/20
In the study of resolutions and human willpower, frequently overlooked in the success or otherwise of new starts are the influence of environment and routine. Keeping resolutions means forming new habits – and that's harder than you think. Read more about five rules from psychology to help keep your new year's resolutions
Low returns stoke investor appetite for risk
Bloomberg, 13/11/19
When interest rates are very low, as they have been now for some years, investors can be tempted to patrol the frontiers of yield, taking bets they might not have considered in other times. In this article, blogger Barry Ritholtz lists five factors he thinks might be driving current risk-seeking behaviour. Read more about how low returns stoke investor appetite for risk
Certainty Is an Illusion
Farnam Street, 10/11/19
If we knew everything about the future with certainty, our lives would be drained of emotion. No surprise and pleasure, no joy or thrill - we knew it all along. The first kiss, the first proposal, the birth of a healthy child would be about as exciting as last year's weather report. If our world ever turned certain, life would be mind-numbingly dull. Read more about why certainty is an illusion
Traits of the Worst Investors
A Wealth of Common Sense, 08/11/19
One way of learning how to be a good investor is to study the habits of the worst ones. Those habits include an excessively short-term focus, trying to get rich in a hurry and focusing on areas that are out of your control. Ben Carlson says everyone makes these mistakes at some point or other. The trick is learning from them. Read more about traits of the worst investors
The beating-the-market myth
The Evidence-Based Investor, 11/09/19
The idea that investors can consistently do better than the market, after allowing for risks and fees, is a fanciful one. The truth is even the pros struggle to outperform the market year-in and year-out. In fact, most people struggle to secure even the market rate of return, largely due to their own impulsive behaviour. Read more about the beating-the-market myth
Common Sense Investing and Sustainability
Dimensional, 09/09/19
How can you reduce your portfolio's environmental footprint while maintaining sound investment principles and achieving your investment objectives? This four-step approach ticks all the boxes while providing transparency around your desired outcomes. Read more about common sense investing and sustainability
Why does so much news seem negative? Human attention may be to blame
Los Angeles Times, 05/09/19
Ever wonder why there's so much bad news out there? Maybe it's because we find bad news more interesting than good news. A recent study of over 1,000 people in 17 countries concludes that we pay more attention to negative news than to positive news. Read more about why so much news seems negative
The flat-out truth
Dimensional, 26/08/19
Investors in bonds usually demand higher yields for lending money out for longer periods. When this situation reverses, we say the yield curve has "inverted". But does this tell us anything meaningful about the timing and direction of equity market moves? Fund manager Dimensional looks at Australia and other markets. Read more about the flat-out truth
The danger of comparing yourself to others
Farnam Street, 19/08/19
Warren Buffett once observed that happier people tend to operate according to an internal benchmark. If your concept of success involves comparing yourself to others, you can end up taking unnecessary risks, focusing on things you can't control and making yourself miserable. Read more about the danger of comparing yourself to others
Room to disagree
HumbleDollar, 18/08/19
A key assumption of people who affect self-confidence about investment markets is that the best answer to tough questions about the financial or economic outlook is 'yes' or 'no'. In truth, the best answer is often 'it depends' or 'I don't know'. This article argues taking a less simplistic, non-binary approach to these questions. Read more about room to disagree
Everybody knows everything
The Irrelevant Investor, 16/08/19
A few years ago, the idea of everyday investors debating the implications of inverted yield curves would have seemed fanciful. But these days, everyone has access to market information in real time via their devices. According to blogger Michael Batnick, that increases the risk of investors mistaking noise for signal. Read more about everybody knows everything
Reacting to markets
Dimensional, 12/08/19
If there is anyone worth listening to on how markets work, it's Nobel Prize-winning financial economist Eugene Fama. Known for his work on how hard it is to outguess the market, Fama says while volatility can be unsettling, the best approach is to stay focused on your long-term goals. Check out this short video. Read more about reacting to markets
How to Tell If Your Investment Is Really Responsible
Bloomberg, 11/08/19
Sustainable investing assets in the US, Canada, Europe, Japan, Australia and NZ stood at $US30.7 trillion in 2018, up 34% in two years. But how do you evaluate and compare investments? This article from Bloomberg poses some key questions to ask. Read more about how to tell if your investment is really responsible
The 1 minute and 17 second financial plan
A Teachable Moment, 05/08/19
If you compressed earth's history into a 24-hour period, humans have been here for a little over a minute. Our time on the planet is limited, both as a species and as individuals. And that's why the great virtue of a financial plan is to give you clarity about what matters and what you can do to achieve it. Read more about the 1 minute and 17 second financial plan
How to resist the lure of overconfidence
Scientific American, 02/08/19
We don't like to exist in a state of uncertainty, but that's how the world often is. Many of us cope by trusting those who sound ultra-confident about the future, seeing precision where none exists or insisting certain outcomes are more predictable than they are. How can you stop yourself falling victim to this effect? Read more about how to resist the lure of overconfidence
Different ways to be rich in 2019
A Wealth of Common Sense, 01/08/19
Having sufficient money to be financially secure is important. But there are plenty of other ways to live a wealthy life that extend beyond how much money you have in the bank. In this article, blogger Ben Carlson lists six ways of being rich that help you strike a balance in your life and find what you value. Read more about different ways to be rich in 2019
You are probably overconfident. (If you skip this, doubly so.)
The New York Times, 29/07/19
One manifestation of the confidence effect in investment is a tendency to take personal credit for good outcomes and blame others for negative ones. Drawing on his experience as a skier, Carl Richards says people tend to fall victim to a feedback loop in which they attribute to their own skill what is effectively luck. Read more about you are probably overconfident
Investors are usually wrong. I'm one of them.
The New York Times, 26/07/19
Survey after survey find the evidence is clear. Most people, in trying to avoid the effects of market volatility, tend to make it worse for themselves. They buy high, sell low, lose money in trading costs, and take more risk than they need to. In fact, most people don't even get the capital market rate of return. Read more about how investors are usually wrong
20 ideas that will take the fear out of financial planning
Psychology Today, 25/07/19
For many people, money and anxiety go hand in hand. There always seems something to worry about, whether it is the ups and downs of markets, managing the mortgage or dealing with unexpected healthcare costs. These 20 thoughts about money may help soothe some of those fears. Read more about 20 ideas that will take the fear out of financial planning
The Randomness of Global Equity Returns
Dimensional, 22/07/19
If you listen to the financial news, you'll often hear pundits talk about which market will be the next best place to invest. The truth is equity returns are random and efforts to anticipate a pattern are likely to fail. The good news is you don't need to be a soothsayer to make markets work for you. Read more about the randomness of global equity returns
Who actually feels satisfied about money?
The Atlantic, 21/07/19
The people who feel best about their financial situation are often those who are fully aware of what their financial situation is. Knowing how much you earn is not enough. You also need a grasp on what you are spending and saving. This article highlights the virtue of clarity about your finances and your goals. Read more about who actually feels satisfied about money
The key to developing a better relationship with money
Forbes, 18/07/19
Money and emotions are frequently connected. A financial problem like reckless spending can point to deeper issues. Psychologists recommend taking a step back and examining the underlying feeling. A CEO explains how this represented a turning point in his relationship with money. Read more about the key to developing a better relationship with money
Why Investors Should Ignore Predictions
US News, 10/07/19
Humans love certainty. That's why there are polls about upcoming elections. It's why people check the weather report. And it's why investors have such an appetite for market predictions. But think about this: If everyone had a crystal ball that forecast the correct way to invest, there would be no market risk. Read more about why investors should ignore predictions
Fact Check: Why Is Beating The Market So Hard?
Investing.com, 01/07/19
Legendary investor Warren Buffett bet a million dollars that a simple index fund would outshine a basket of high-priced and sophisticated hedge funds over 10 years. He won the wager easily. Why is beating the market so hard? It comes down to how markets work. This article provides perspective. Read more about why beating the market is so hard
10 Unavoidable Money Conversations to Have With Your Spouse, Kids, and Parents
Real Simple, 26/06/19
There are different types of conversations about money, concerning partners, children, or ageing parents. Here's a practical structure for 10 of these talks, covering why each is important, when to talk about it and how to bring it up. Read more about 10 unavoidable money conversations
The Placebo Effect in Investment
Behavioural Investment, 26/06/19
Psychologists have noticed that ill people sometimes report feeling better even when the pill they are given contains no active substance. This happens in investment, too. People can think that short-term trading or performance-chasing is making them better off. In reality, it is all in their minds. Read more about the placebo effect in investment
"The Simple Dollar" Is Not "The Easy Dollar"
The Simple Dollar, 18/06/19
People often mistake what's simple for what's easy. Knowing you need to eat less and exercise more to lose weight is one thing. Achieving it is another. Likewise, having a savings plan and sticking to it are two different things. So how can you bridge the gap between simple and easy? Here are several ideas. Read more about "The Simple Dollar" is not "The Easy Dollar"
Math vs. Emotion
HumbleDollar, 16/06/19
When building a long-term portfolio, there are a couple of considerations. One is a purely mathematical analysis of risk and return. But also important is knowing you have a portfolio you can live with. In this article, the writer suggests five things to consider when the maths points one way and your stomach another. Read more about math vs. emotion
Financial Astrology, From Manure to Markets
A Teachable Moment, 03/06/19
Being repeatedly shown to be wrong has never stopped experts from making new predictions. This is partly because few people remember the wrong calls and partly because forecasters can make big money from predictions. Tony Isola looks at some of the famous wrong calls from history. Read more about financial astrology
The Peculiar Blindness of Experts
The Atlantic, 01/06/19
In business, esteemed and highly paid forecasters routinely are wildly wrong in their predictions of everything from the next market correction to the next housing boom. The problem, says this writer, is that experts often are too devoted to their models, lack humility and fail to see the big picture. Read more about the peculiar blindness of experts
Avoiding Stupidity is Easier than Seeking Brilliance
Farnham Street, 27/05/19
One of the most popular quotes from Charlie Munger, the long-term partner of legendary investor Warren Buffett, is that it is remarkable how much advantage they have achieved by trying not to be stupid instead of seeking to be smart. This article from the blog Farnam St explains the difference. Read more about how avoiding stupidity is easier than seeking brilliance
Emotions and Decision Making: Logic-Beating Biases
Enterprising Investor, 23/05/19
Why does emotion so often outweigh logic in financial decision-making? Our unconscious mind is a major culprit. It filters out unpleasant information as it is received to reduce the sheer volume of data coming in. Here are four common ways these mental short-cuts can lead us astray. Read more about emotions and decision making
Déjà Vu All Over Again
Dimensional, 13/05/19
Remember BRIC funds? This strategy, popular about 15 years ago, suggested building portfolios around the emerging economies of Brazil, Russia, India and China. More recently, it's all about 'FAANG' stocks (Facebook, Amazon, Apple, Netflix and Google). This article suggests casting a sceptical eye on investment fads. Read more about déjà vu all over again
Hedge Funds Keep Failing to Deliver on What They're Selling
Bloomberg, 25/04/19
Coming out of the financial crisis, hedge funds and other alternative investments were supposed to be the answer in guarding against volatility and providing upside. Problem is it hasn't worked out that way. Performance has been poor and even where it hasn't been, high fees have eaten up returns. Barry Ritholtz explains. Read more about hedge funds that keep failing to deliver on what they're selling
6 Decisions That Separate People Who Reach Success From Those Who Only Dream About It
Inc.com, 24/04/19
It may sound obvious but people who succeed tend to take purposeful, meaningful action; they don't just think about it. The starting point is knowing who you are and what you want. From there, it shifts to setting a plan and learning to deal with the inevitable setbacks. This writer lists six common habits of successful people. Read more about 6 decisions that separate people who reach success from those who only dream about it
Why Are Stories so Important to Investors?
Behavioural Investment, 23/04/19
Journalism is often referred to as writing history on the run. Every day, the news must be wrapped up into bite-sized stories, with heroes and villains, causes and effects all clearly laid out. But reality is rarely that simple. We can easily underestimate the roles of randomness and chance. This article explains. Read more about Why stories are so important to investors
To Change the Way You Think, Change the Way You See
Harvard Business Review, 16/04/19
To think differently about the challenges you face, it can pay to change how you see things. In this, we can learn from great innovators who found that unlocking a thorny problem often came down to looking at a familiar situation in an unfamiliar way. The key is grasping the distinction between seeing and observation. Read more about change the way you think, by changing the way you see
Compounding Knowledge
Farnam Street blog, 08/04/19
Legendary investor Warren Buffett is known to rarely use a computer. He argues that so much of what people feverishly click on is disposable information that offers little long-term value. Instead, his view is that by slowing down and being more reflective, we are more likely to make better decisions. This article explains. Read more about compounding knowledge
My 86-Year-Old Mother Is An Inadvertent Market Timer
Forbes, 07/04/19
A common mistake among market forecasters is to be too influenced by the recent past. So if shares have been doing well relative to bonds, they may decide they want to load up on more risk. In this article, blogger Rick Ferri uses the case of his 86-year-old mother to show why that's a bad idea. Read more about my 86-year-old mother is an inadvertent market timer
The Forecasting Business Shouldn't Be This Bad
Bloomberg, 02/04/19
Of course, predictions sometimes do turn out to be accurate. But the problem then becomes working out whether this was due to luck or skill. One suggestion is that forecasters should be more up front about their underlying model's past record and acknowledge all the unknown variables, as Barry Ritholtz explains. Read more about the forecasting business shouldn't be this bad
When in Doubt
HumbleDollar, 31/03/19
Big financial decisions involve lots of variables – your future income, your savings rate, interest rates, tax changes – you know the score. We can make forecasts, of course, but that means working with incomplete information. So how can we manage this inherent uncertainty? This writer has a couple of ideas from the world of poker. Read more about what to do when in doubt
Do Your Finances Spark Joy? Applying the 'KonMari' Method to Your Money
The Simple Dollar, 07/03/19
Japanese lifestyle guru Marie Kondo helps people declutter their homes and simplify their lives. The ‘KonMari’ approach involves asking which of your possessions "spark joy". So, if you can declutter your house, why not declutter your finances as well? Read more about applying the 'KonMari' method to your money
The Psychology Behind Smart People Saying Dumb Things
Zen Investor, 04/03/19
The global financial markets are full of extremely smart people, many of whom believe they have what it takes to get an edge over everybody else. But highly intelligent people often do very dumb things when it comes to investing. Here are six ways even the smartest folk can fool themselves. Read more about the psychology behind smart people saying dumb things
Warren Buffett: You do not want to have a political view when investing
CNBC, 25/02/19
Legendary investor Warren Buffett says when it comes to investing he leaves his ideological views at the door. In this candid interview with CNBC, Buffett explains that he's invested under Democrat presidents and Republican presidents. To him, the outcomes make no difference to his strategy. Read more about Warren Buffett: You do not want to have a political view when investing
Is an Obsession with Outcomes the Most Damaging Investor Bias?
Behavioural Investment, 19/02/19
We tend to judge the quality of a decision by its consequence. After all, results often provide a useful gauge of the value of the actions that led to them. However, once you add a dose of randomness things start to become problematic, as this article explains. Read more about an obsession with outcomes
Accepting the Uncertainty of Our Financial Life
The New York Times, 08/02/19
Our intolerance of uncertainty can cause havoc in our financial lives. It can lead to rash decisions in response to news events or chasing past returns. The truth is it's virtually impossible to consistently time the market. So, what do we do? The answer is to start by focusing on what you can control, as Carl Richards explains. Read more about accepting the uncertainty of our financial life
Budgeting With Cardi B
A Wealth of Common Sense, 07/02/19
Anyone who has witnessed the spending behaviour of wealthy celebrities will know that having more money does not necessarily translate to better financial outcomes. In fact, many people get stuck in a consumption arms race in which every increase in income just gets absorbed by a higher standard of living. Ben Carlson explains. Read more about budgeting With Cardi B
Why Do We Make Stupid Investment Decisions?
Behavioural Investment, 05/02/19
Although markets are awash with randomness, there are vital and often simple cues that investors choose to ignore. A common one is overlooking signal for noise. In other words, people get distracted by headlines and miss the long-term returns available through discipline. Here are eight reasons stupidity is so common. Read more about why we make stupid investment decisions
Stock-Picking Contests Are No Way to Pick Stocks
Bloomberg, 01/02/19
While some people choose their own favourite stocks, others outsource their investments to champion stock pickers. Part of the problem with this approach is that stock picking discussions typically fail to take account of individual goals. The other issue is that the outcomes are totally random. Barry Ritholtz explains. Read more about stock-picking contests being no way to pick stocks
Retirement Readiness: Establishing Your Savings Rate
Dimensional Fund Advisors, 31/01/19
How much should you save for retirement? And how much can you spend? Answering these questions can be a lot easier if you do things like determine your savings rate, monitor your progress and make adjustments over time. Dimensional Fund Advisors’ head of research Marlena Lee explains in this short video. Read more about retirement readiness: establishing your savings rate
The Single Greatest Error
The Irrelevant Investor, 29/01/19
What makes stock picking so difficult is that identifying a good product or even a great business is only one side of the equation. Even if you had the facts ahead of time, you still wouldn't necessarily know how the market will respond. That's because all the current information is already reflected in the price. Read more about the single greatest error
He should be a billionaire, but Jack Bogle chose to make others richer
Sydney Morning Herald, 19/01/19
He could have been a billionaire several times over, but John ('Jack') Bogle chose to focus instead on reinforcing the lessons to people of keeping costs down in investing, not trying to outguess the market and focusing on their goals, not what someone was trying to sell them. This obituary lays out his remarkable achievement. Read more about how he should be a billionaire, but Jack Bogle chose to make others richer
Narrative or Data? Yes.
The Big Picture, 18/01/19
Financial media often recommend companies as investments because of their 'superior management' or 'excellent business plan'. The problem is none of these statements are data dependent. They are just stories that the market already knows and has already priced in. Barry Ritholtz suggests a different approach. Read more about narrative or data
What I Learned From Jack Bogle
A Wealth of Common Sense, 17/01/19
A frequent message to investors from Jack Bogle was the folly of speculation. He talked about speculation as the "expectations" market and contrasted it with the real market of investing. In this article, professional fund manager Ben Carlson lists this among a dozen key principles he learnt from Bogle. Read more about what I learned from Jack Bogle
Thank You, Jack Bogle
Dimensional, 16/01/19
According to David Booth, founder of asset manager Dimensional, the lessons from Jack Bogle's sizeable contribution to investing go beyond indexing. Significantly, his focus was on improving the lives of individual investors by pointing to the folly of high-fee speculation where the bulk of the benefits went to fund managers. Read more about thank you, Jack Bogle
How to survive a volatile market
Morningstar, 15/01/19
Market commentators seek to make headlines by making bold predictions about the year ahead. However, the truth is that no-one has a reliable crystal ball and it pays to be sceptical of stories that neatly fit recent market movements into a forecast. Analysts at Morningstar share some practical tips on coping with volatility. Read more about how to survive a volatile market
How To Invest For The Long Term In A Volatile Market
Forbes, 15/01/19
Among the behavioural factors that investors are prone to, a common one is "recency bias". This is the tendency for people to put undue weight on recent events and extrapolate them into the future. But with the right structure, a long-term investment process and a behavioural checklist, it's easier to deal with volatility. Read more about how to invest for the long term in a volatile market
David Booth on Forecasting
Dimensional, 14/01/19
So much media commentary around markets is just noise. For example, at the start of every year you'll see articles saying it's now "a climate for stock pickers" or that "the rules have changed". Veteran investor and fund manager David Booth has heard it all and provides a refreshing perspective on market forecasting. Read more about David Booth on Forecasting
Can More Information Lead to Worse Investment Decisions?
Behavioural Investment, 09/01/19
While we’re deluged with information these days, the fact is more information does not necessarily lead to better decisions. What’s often overlooked is how relevant the information is to your circumstances and whether it is actionable. This article argues that a better approach is to focus on what matters. Read more about more information leading to worse investment decisions
Good companies often make bad investments, study shows
CNBC, 08/01/19
A good reputation, strong competitive advantage and popular brand may not only be the hallmark of a healthy company, but also a sign of a poor investment idea, according to new research. The Morningstar study found securities with desirable traits generated lower expected returns than less popular companies. Read more about how good companies often make bad investments
2017 vs. 2018 in the Stock Market
A Wealth of Common Sense, 03/01/19
While the financial media might try to make it seem otherwise, the fact is one year in the stock market should have no bearing on what happens in the next year. Just look at the differences in performance between 2017 and 2018. According to Ben Carlson, those two varying results show that anything is possible in 2019. Read more about 2017 vs. 2018 in the Stock Market
Not apocalypse now: why it is safe to ignore gloomy forecasts for 2019
The National, 29/12/18
Have you noticed how much media commentary about the market outlook is gloomy? We're told to brace for everything from meltdowns to depression. Part of this is economic, as research shows human beings are wired to give greater weight to bad news than good. This means there's an in-built market for fear. Read more about not apocalypse now
2019 Forecast: Predictions Will Be Wrong, Random or Worse
Bloomberg, 08/12/18
Everywhere you look at this time of the year, someone is telling you what stocks to buy in 2019, the chances of a recession, the likely path of interest rates and what will happen to currencies. These forecasts are really guesses and are often just a pitch to get you to trade. In fact, Barry Ritholtz sees forecasting as an exercise in futility. Read more about 2019 Forecast
Change almost always comes as a surprise
The Financial Bodyguard blog, 20/11/18
Did you know that New Zealand was the world's second best performing developed share market in three of the past seven years? Yet in 2017, it was the worst. Who's it going to be in 2019? The truth is no-one knows which countries, sectors or stocks will do well from year-to-year. And that's why you diversify, as this article explains. Read more about change almost always comes as a surprise
Behavioural problems in the heat of summer are a reminder of common paths to losing money
Business Insider, 19/11/18
There's evidence that people are more likely to lose their equanimity in hot weather. Road rage is common at this time of the year, as are blow-ups in the supermarket as the Christmas season descends. As with the heat, market volatility can cause people to make bad money decisions. Here are some of the ways we fool ourselves. Read more about behavioural problems in the heat of summer
The Market's Been Falling. I'm Putting My Money in Stocks Anyway.
The New York Times, 16/11/18
Emotional reactions to falling markets are understandable. But the greater damage often comes from people's response to these events. This particular investor says he's sticking with stocks precisely because he has no idea where the market is headed and because the record shows that mistiming market rallies is costly. Read more about the market's been falling
Should investors diversify away from America?
The Economist, 15/11/18
We all love the comfort of home. In investing it's no different. This tendency to favour local shares is called 'home bias'. But while there are reasons for this bias (like imputation credits), many investors in Australia, NZ or even the US are too anchored to home. The Economist magazine makes this case for spreading your wings. Read more about should investors diversify away from America
The global rise of sustainable investing
Schroders, 12/11/18
The evidence of investor awareness of sustainability is growing. In a study of 22,000 people in 30 countries, a global asset management firm found nearly 90% of respondents had some idea of what sustainable investing is. And nearly 80% said it had become more important to them over the previous five years. Read more about the global rise of sustainable investing
Responsible Investment Benchmark Reports
Responsible Investment Association Australasia, 12/11/18
People in Australia and New Zealand are among the most enthusiastic adopters of sustainable or responsible investing. A 2018 survey by the Responsible Investment Association of Australasia found core responsible investment rose by 188% last year in Australia and by 100% in New Zealand. Read more about Responsible Investment Benchmark Reports
Common Sense Investing and Sustainability
Dimensional, 12/11/18
Investors often ask whether investing well and incorporating their values around sustainability can be compatible. For instance, how can they reduce their portfolio's carbon footprint while still achieving their investment objectives? This article from asset manager Dimensional suggests how you might approach this. Read more about common sense investing and sustainability
Investing based on how you vote is still a terrible idea
The Big Picture, 10/10/18
Politics, by nature, engages our emotions. We often can feel strongly in favour of our tribe and strongly against the other. But this red team-blue team thinking is not a good framework for making investing decisions. In fact, it can be totally counter-productive, as financial blogger Barry Ritholtz explains. Read more about how investing based on how you vote is still a terrible idea
Why economic forecasting has always been a flawed science
The Guardian, 02/09/17
A challenge with forecasting is that a small change in a few variables can make predictions fiendishly complex. For instance, a call that coal stocks will rally may rest on assumptions about Chinese growth or demand for alternative energy sources. This article shows why it's so hard to make market or economic forecasts. Read more about why economic forecasting has always been a flawed science
Why Smart People Make Dumb Mistakes With Their Money: Part 1
Psychology Today, 12/07/16
Feelings and hunches are usually not a good guide to long-term investment decisions. We tend to over-rate our own competence and give too much weight to recent events. This blog post from Psychology Today lists eight common behavioural biases behind dumb money decisions. Read more about why smart people make dumb mistakes with their money
Asking the Right Questions
The Big Picture, 18/07/13
Has the Australian dollar reached bottom yet? What will happen to interest rates next year? Will China and the US resolve their trade war? These are the questions that keep financial journalists in business. But for long-term investors, there are better ones to ask. Blogger Barry Ritholtz suggests four basic questions. Read more about asking the right questions
Less is More: Keep Investing Simple
A Wealth of Common Sense, 11/02/13
The choices we face in our lives often involve complex and difficult trade-offs. So why make investment any more complicated than it needs to be? There are some common-sense principles around investing that are worth considering. In this article, Ben Carlson suggests 15 rules to keep it simple. Read more about less is more
A Survival Guide for Beating Information Addiction
Zen Habits, 09/03/12
Are you suffering from information addiction? It’s a growing problem as people spend more and more of their time online — and while online tools are amazing, being addicted to checking them can steal most of your day. This article has some useful tips on limiting the noise coming at you every second of the day. Read more about a survival guide for beating information addiction