The Stock Market Sits Down for a Job Review

"Describe your perfect day." Such a simple interview directive rarely fails to provide the most telling of replies.  Responses are almost never scripted in advance and usually provide productive insight into what motivates the interviewee, what passions she has, her creativity, or how she organizes her day.  Responses from previous experience posing this question (even [...]

Zero-Based Budgeting Applied to Personal Finance

If you have ever run a businesses or worked in corporate finance, you are likely familiar with the concept of zero-based budgeting (ZBB) as an alternative to traditional budgeting.  The traditional form of budgeting - and the one most commonly used in corporate America - uses the amount spent last year in each category (or [...]

Turbulence Forecasting for Pilots and Financial Advisors

I'm learning to fly, but I ain't got wings I recently spoke with a pilot about how he obtains and handles the forecasts for in-flight turbulence in advance of a flight.  Before each flight, he gets a fairly precise report of weather along the route and something called a turbulence plot, which is based on [...]

How A Negligent Rule of Thumb Causes Poor Divorce and Estate Planning Decisions

An important consideration in divorce and estate planning that often gets ignored, underappreciated, or just poorly evaluated is the relative comparison of different account types: tax free accounts, tax deferred accounts, and taxable accounts.  While many people tend to think of $100,000 as $100,000, the account type in which the money resides can make a [...]

4 Things You’ll Wish You Did Before the Bull Market Becomes a Bear Market

"We all must suffer one of two things: the pain of discipline or the pain of regret." Entrepreneur Jim Rohn was not specifically describing the practice of investing with this quote but it fits perfectly.  The harsh reality of investing is that there will be good times and there will be bad times.  Getting greedy [...]

Scrabble, Monkeys, and a Better Way of Passive Investing

Oxyphenbutazone is a non-steroidal, anti-inflammatory drug used mostly in eye-drops that was pulled from markets worldwide in the mid-1980’s for its link to bone marrow depression.  More interestingly, but perhaps just as trivial, Oxyphenbutazone represents the highest possible scoring play in Scrabble.  Play it across three triple word score squares and eight already-played, perfectly positioned [...]

Dividends May Lie…And So Might the Marketing Pitch of Dividend Investing

Few things in our profession are more frustrating than when financial advisors deliver bad financial advice.  It doesn’t have to be that bad financial advice is dishonest or delivered for the wrong reasons (like it is so often, for the benefit of the advice-provider).  It is just that misguided or blatantly wrong financial advice hurts consumers and [...]

Q1 2017 Investment Commentary Part II: Forecasting the Future

Let’s start with a debatable, but widely held fundamental concept of investing: the best predictor of future returns for stocks is the current valuation.  This is generally true of a single stock, a sector, or an entire country’s stock market.  Academics and practitioners debate whether important factors like gross profitability, price momentum, earnings momentum, yield, [...]

Q1 2017 Investment Commentary Part I: The Value of a Crystal Ball

You probably do not know who Jim Simons is.  He likes it that way.  Simons is a quiet figure who is not interested in self-promotion and does not need to be told how great he is.  Despite undoubted countless interview requests over the past 35 years, Simons has largely declined the opportunity to tell his [...]

The Harsh Realities of Individual Bond Investing

Spend any time working in the kitchen of a restaurant and you will think of restaurants very differently going forward.  Following a short experience in a restaurant kitchen during college, I’ve never once sent a meal back for being undercooked, overcooked, or even the entirely wrong order.  Use your imagination and we can just leave [...]