A Wealth of Common Sense


 

A couple years ago I read an article about a new online brokerage firm that was geared towards young people called Robinhood. How many people do you know who get a gym membership in January, go for a couple weeks and then never go again for the rest of the year (while still dutifully paying their membership dues as if they’ll return some day)?

gym market membership money pay Robinhood stock trade users young

 

Your Brain on $ [0.13]

Posted on Aug. 14, 2017, 1:05 a.m. by A Wealth of Common Sense @ [source]

Your Money & Your Brain by Jason Zweig is my favorite book on human behavior so I’m constantly sourcing, re-reading and using material from the research.

The main focal point is how the brain affects financial decisions but it’s obvious the material goes beyond money matters.

book brain conscious financial investment money parts re reflexive Zweig

 

The Biggest Common Investment Errors [0.04]

Posted on Aug. 10, 2017, 8:42 p.m. by A Wealth of Common Sense @ [source]

It’s hard to believe but it’s now been 10 years since the first rumblings began prior to the Great Financial Crisis. This is hard to do when you see your friends making money on an individual stock or fund as the fear of missing out (FOMO) can be difficult to avoid.

crisis financial goals hard investment investors market plan portfolio quant

 

It’s much easier to come up with the reasons for a bear market after the fact so I like the idea of thinking these things through beforehand, even if it’s impossible to predict the future. Predicting a recession is no easier than predicting the peak in equities, but the majority of the worst stock market sell-offs throughout history have occurred around economic contractions.

crash economic gain inflation investors market reason recession stock yield

 

10 Questions [0.08]

Posted on Aug. 8, 2017, 8:07 p.m. by A Wealth of Common Sense @ [source]

Are investors right to worry about bonds more than stocks? The Wealth of Common Sense anecdotal sentiment reading shows that most investors are more concerned with bonds these days than stocks.

coming crash events investors japan market millennial stock things years

 

A few weeks ago I wrote that I’m optimistic about the future of the finance industry. Maybe this is the value investor in me talking because expectations are so low following the financial crisis but I’m especially bullish on young people in finance.

brand care changing clients culture finance financial generation young Younger

 

Time Scarcity & The Allure of More [0.21]

Posted on Aug. 3, 2017, 9:57 p.m. by A Wealth of Common Sense @ [source]

A new report from researchers at the University of British Columbia shows that buying time makes people happier. Now that I have newborn twins as well I have no choice but to make more efficient use of my time.

busy happiness hours management money report scarcity spend spending things

 

Why Is There a Retirement Crisis? [0.13]

Posted on Aug. 2, 2017, 4:31 p.m. by A Wealth of Common Sense @ [source]

It seems like every week I see another survey about how ill-prepared the baby boomer generation is for retirement. Obviously, these figures don’t account for things like inflation, taxes, fees, behavioral issues, etc.

asset baby boomer crisis financial market money prepared retirement returns saving

 

I remember reading an article at the start of 2013 that concluded, “This market reeks of euphoria.” The S&P 500 is up around 90% since then. In the financial markets, this makes it harder than ever to gauge investor sentiment.

crash difficult gauge index indicator investors market sentiment tail volatility

 

When Risk is Not Rewarded [0.20]

Posted on July 31, 2017, 12:54 a.m. by A Wealth of Common Sense @ [source]

I remember reading The Accidental Billionaires just after it came out in 2009 or so and being blown away by the back story of how Facebook was founded (This is the book the movie Social Network was based on).

After reading about the drama surrounding the founding of the company in a Harvard dorm room I would never have guessed Facebook would so quickly grow to become one of the largest public companies in the world.

Big facebook gain investors IPO outsized public returns stock volatility

 

Earlier this week I wrote (again) about the importance of understanding financial market history. This book shows how primitive the financial markets were before banking regulations and the Fed came around.

banking book crisis earlier financial importance investment market topic understanding

 

Bitcoin, Stocks & The Fear of Missing Out [0.06]

Posted on July 26, 2017, 6:20 p.m. by A Wealth of Common Sense @ [source]

I don’t have any groundbreaking insights on the cryptocurrency phenomenon. The cryptocurrency is up around 124 percent for 2017.

aversion Bitcoin cryptocurrency gains investors losses market performance stock type

 

Earlier this week I wrote about the attributes successful investors share but I forgot one — a deep understanding of financial market history. So it was published, I think maybe only monthly, but certainly the most frequently weekly.

bull dow investors market minute portfolio stock ten things year

 

The Game Beyond the Game [0.10]

Posted on July 24, 2017, 12:32 a.m. by A Wealth of Common Sense @ [source]

For those working in the financial industry or managing money for other people, the final piece of the puzzle is having the ability to effectively communicate your thoughts, ideas and philosophy in a way that others can understand. Desai uses classic literature, philosophy, movies and history to provide a different perspective on a wide variety of financial subjects.

Bell burner cell diversification finance financial game phone police risks shows

 

The Biggest Stocks [0.12]

Posted on July 21, 2017, 12:40 a.m. by A Wealth of Common Sense @ [source]

In a recent piece, I discussed why it’s not that out of the ordinary for a handful of stocks to account for a large portion of the stock market’s gains.

Ned Davis Research wrote a piece a few years ago that showed from 1972 to 2013 the S&P 500 was up close to 5000% but if you would have owned just the biggest stock in the index every year you would have only gained around 400%.

Big biggest companies gains market ordinary piece stock top years

 

Every year it seems investors worry that far too few stocks are carrying the market higher.

Investors are becoming increasingly worried that a few stocks seem to be driving the returns in the S&P 500 this year.

advance decline breadth divergence falling gain indicator investors market rising stock

 

What’s Your Track Record? [0.07]

Posted on July 18, 2017, 5:36 p.m. by A Wealth of Common Sense @ [source]

The mid-to-late 1990s in Major League Baseball saw a huge uptick in home runs as steroid use became rampant.

Everyone has heard the boilerplate disclaimer from the investment profession: past performance is not an indicator of future results.

fund investing investment investors money past performance performance returns strategy venture

 

Talking Asset Allocation & ETFs on WDYM [0.07]

Posted on July 18, 2017, 1:42 p.m. by A Wealth of Common Sense @ [source]

The current market environment is a tough one to handicap. On the other hand, the “most hated bull market of all-time” continues to charge higher, causing valuations and investor allocations to stocks to go far above their long-term averages.

current environment flashing handicap long market side term time tough

 

The Ups & Downs of Leveraged ETFs [0.03]

Posted on July 16, 2017, 11:16 p.m. by A Wealth of Common Sense @ [source]

A friend recently asked for some advice about his investment portfolio.

As my friend and colleague Michael Batnick likes to say, “bad things happen in bad markets.” This means that volatility is typically heightened during a sell-off when investors panic, as they are prone to do.

bear drawdown index leverage leveraged ETF market strategy type UPRO volatility

 

My Podcasting Superpower [0.09]

Posted on July 15, 2017, 1:58 p.m. by A Wealth of Common Sense @ [source]

Some day I’ll tell my kids how we used to have to listen to talk radio in the morning, wait for a DJ/VJ to play our favorite song/video or buy an entire album when we liked a couple songs by an artist.

I know it’s hip for all the cool kids to look down on Malcolm Gladwell for some reason these days but his podcast is so good.

episode faster favorite found listen listening podcast Radio song speed