Tag

risk

Turns Out, Most Stocks Fail to Outperform Treasury Bills.

By | The Friday Brief | 2 Comments

You may have heard of the 4% rule as it pertains to retirement. It goes like this: If you begin retirement withdrawing 4% of your savings and adjust each following year’s withdrawals for inflation, your money should last 30 years. It may be the most widely accepted and most often cited rule of personal finance. Fewer of us, though, are familiar with the other 4% rule. I admit, it’s not something I was aware of until recently, but the implications of it have further solidified my beliefs about the most appropriate way to invest. In January of 2017, Hendrik Bessembinder,

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How’s Your Portfolio Doing?

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I’m not a huge sports fan, although sometimes I wish I were.  If asked how I thought the Carolina Panthers defensive line was looking this year my honest answer would be that I have no idea.  But if I were asked that same question in a place where I felt like I really wanted to fit in, I might awkwardly blurt out something like, “I’d say strong…to…quite strong.” That’s probably similar to what many people would say when asked about how their portfolio was doing.  Much like Ben Stiller in this clip from the 90’s comedy Meet the Parents. A few

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The 4 Keys to a Good Investment Process

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“People are worried that people aren’t worried enough.” That’s the phrase Matt Levine has used to describe the current state of the stock market, or rather many investors’ thoughts on the stock market. What he means is that the stock market has been calmer for a longer period of time than it usually is, and though there are no blatantly obvious reasons for this to discontinue (nuclear war notwithstanding), people are getting antsy in the same way I might get antsy not hearing anything from my two-year old son in his room for longer than about 45 seconds. Now, there are

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Your Resources Are Limited – Manage Them Efficiently

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One of the most overlooked and yet most important aspects of long term investing is efficiency. The concept of efficiency touches our everyday lives in so many routine ways we take it for granted. We set the thermometers down or up when we are away to conserve money and energy use. We recycle to reduce the waste going to landfills and slow the drain on our natural resources. We are more gentle on the accelerator when gasoline prices are high. We might even think to remove unnecessary weight of stuff on the seats and in the trunk that serve no purpose in our daily commute.

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Efficiently Using the Capital Markets for Lifetime Savings

By | Briefs about our Process, The Friday Brief | No Comments

It is a myth that people saving for life purposes need actively managed funds to comfortably reach their financial goals. In fact, it can be argued that actively managed funds significantly slow progress and reduce their lifestyles, both now and later, compared to efficient portfolios. Technically defined, an efficient portfolio delivers the highest return for a given amount of risk. Think of risk as the volatility of the portfolio, but more specifically, the chance of losing money at any given point in time. Risk and volatility have both practical and theoretical applications. We are hardwired to understand the practical. When we see our investments decline,

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Process

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Almost universally, people describe their financial program in terms of affinity and trust for their advisor. It’s only natural that relational ties would play such a central role in one of our most intimate relationships. But are trust and affinity enough? Are these feelings sufficient foundation for the confidence we place in these individuals and their companies for one of the most important roles of our lives?

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Tornadoes and Clarity

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We had some really bad weather this week in North Carolina (as did other places in the Southeast). Between tornadoes and severe thunderstorms and all that accompanies those events, it was probably enough to make you think more deeply than you’re accustomed to about what’s really important.

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Hurricanes, Economies, Markets, and Butterflies

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“And a butterfly can flutter its wings over a flower in China and cause a hurricane in the Caribbean. I believe it. They can even calculate the odds. It just isn’t likely and it takes…so long.” Robert Redford as card shark Jack Weil in Havana “In chaos theory, the butterfly effect is the sensitive dependence on initial conditions in which a small change in one state of a deterministic nonlinear system can result in large differences in a later state. The name of the effect, coined by Edward Lorenz, is derived from the metaphorical example of the details of a

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Fortress America?

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Can the US economy continue to plow ahead against global headwinds of the slowing economies of China, Europe and the developing world? Can it withstand the rapid devaluation of the oil industry and commodity prices? And most important of all, can it remain healthy during a period of rising interest rates?

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