Relationship of Aging and the Low Return Investment Environment

At various points in life, individuals begin to avoid roller coasters, back flips off the high dive, cartwheels, and full contact football.  They take more frequent breaks in their weekly tennis game and aspire to completing a marathon rather than finish one in less than 3-hours.  Instead of travelling to Spain to run with the [...]

The Fallacies of Rising Interest Rates

Buckle up, America.  Higher interest rates are coming.  Forget that we have collectively observed this erroneous warning a dozen times or so over the past decade.  We also had 13 Triple Crown attempts since Affirmed in 1978 and consider what happened recently to that lengthy streak of failed expectations. For the first time since June 2006, [...]

Pros and Cons of Toddler Golf and Target Date Funds

There is a refreshing simplicity to the golf game of a toddler.  I appreciate this because my youngest son’s passion for golf is only superseded right now by that of chocolate chip cookies and his blanket.  He spends long stretches every day hitting a foam golf ball around the yard and occasionally we visit the [...]

The Lure of Investment Prediction

The following is an excerpt from the quarterly letter we recently sent to clients on the lure of investment prediction. Rock-paper-scissors ranks somewhere near the top of a list of universally known childhood games.  The game separates itself from games of pure chance like coin flipping or the card game war in that participants can gain an [...]

Marshmallows and Long-Term Investing

Anyone who attended summer camp as a kid likely equates marshmallows with two things – a fundamental ingredient in making s’mores and the only ingredient needed for a game of chubby bunny.  When a psychologist hears the word marshmallow, however, the first thought may not be of s’mores or chubby bunny.  Instead, a psychologist likely [...]

Ancient Greek Heroes, Lotteries, Homer Simpson, and Investment Discipline

The following is an excerpt from the quarterly letter we sent to clients.   We are an overconfident species.  93% of us believe we are above average drivers, 86% of us believe we are better looking than the average person, and 80% of us think we’re smarter than average.  We are convinced that we know more [...]

The Link Between Soccer and Investing

The following is an excerpt from the letter we wrote to clients this month.  It offers a useful lesson in the behavioral tendencies of humans. Many Americans tuned in to watch the World Cup during the past month.  Some even learned player names and now better understand the game’s subtleties.  From this experience, it likely became [...]

Projecting Bond Returns Over the Next Decade and the Practical Implications

Much has been said or written over the past decade about the future direction of interest rates.  Nearly everyone has an opinion on the subject including professional investment managers, CNBC correspondents, your golfing partner, and the person who cuts your hair. We like to make investment and financial planning decisions based on what is known [...]

Thinking Differently About Asset Allocation

Imagine walking into your new doctor’s office for a routine physical.  The doctor asks for no information other than your age.  From just that piece of information, the doctor gives you a clean bill of health, suggests that you exercise 3 times each week, eat a well-balanced diet, thanks you for coming, and reminds you [...]