Why I Have No Faith in Market Timing
Earlier this week I described the market timing strategy outlined in Mebane Faber’s book The Ivy Portfolio. I chose not to editorialize too much, preferring instead to simply explain the strategy to...
View ArticleWhy Isn’t Everyone Beating the Market?
Sometimes I wonder why everyone isn’t getting better returns than a simple Couch Potato portfolio. Spend a little time and you’ll discover all kinds of strategies that beat the market. And I’m not...
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Carl Richards on Performance Chasing
A couple of posts ago, I asked why everyone isn’t beating the market when there are a dozen or more strategies that promise long-term outperformance. I argued that the problem wasn’t so much that the...
View ArticleWhy RESPs Should Be Kept Simple
In the last couple of weeks I’ve received two questions from readers who were trying to figure out the right strategy for their children’s education savings accounts. Both were smart questions that...
View ArticleShould You Buy Stocks For Your Kids?
If you’re a parent, how can you set your child on the road to investing success? One popular way is to buy young kids shares in companies familiar to them—maybe Disney, Apple, or McDonald’s. The idea...
View ArticleDon’t Invest in the Rear-View Mirror
Investors face many behavioral biases—that’s just part of being human. Perhaps the most difficult to overcome is recency bias: the tendency to believe what has happened in the immediate past is likely...
View ArticleA Market Forecaster’s Report Card
As 2011 came to a close, the usual army of market gurus began making predictions for 2012. I’ve often criticized market forecasters for their embarrassing track records, so this year I made a point of...
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What Investors Can Learn From Weather Forecasts
I’ve never made a secret of my opinion that acting on market forecasts is destructive to investors. Nate Silver’s fascinating new book, The Signal and the Noise: Why So Many Predictions Fail—But Some...
View ArticleDoes a 60/40 Portfolio Still Make Sense?
For as long as I can remember, the traditional balanced portfolio has been 60% equities and 40% bonds. Indeed, all of my own model portfolios use that overall asset mix as a starting point. But a lot...
View ArticleScary When They’re Down, Scary When They’re Up
It’s been barely a month since Alexander Green remarked that we’re currently enjoying “the most disrespected bull market in history.” Green described how investors who were shell-shocked by 2008 were...
View ArticleThe Power of Simple Portfolios
Carl Richards, author of The Behavior Gap, wrote an insightful article in February called Why We Fear Simple Money Solutions. “People say they want things to be simpler—investing, life insurance,...
View ArticleAre Investors Really This Clueless?
Franklin Templeton recently released its 2013 Global Investor Sentiment Survey, which polled 9,518 people from 19 countries. The survey found that 81% of Canadian investors “expressed optimism about...
View ArticleDoes Dollar-Cost Averaging Work?
Many readers were surprised when I answered a recent Ask the Spud question by suggesting you’re usually better off investing a lump sum rather than using dollar-cost averaging (DCA). DCA is popular...
View ArticleWhy Your Problem Is Not Your Funds
In Monday’s post I looked at “smart beta,” which promises to outperform cap-weighted indexing strategies. I’m frequently asked if I think Couch Potato investors should dump their traditional index...
View ArticleThe Biggest DIY Investing Challenges
At the recent Canadian Personal Finance Conference in Toronto, I participated in a panel discussion that touched on a wide range of investing topics. My co-panelists were Michael James and financial...
View ArticlePulling Off the Bandage Quickly
Deferred sales charges (DSCs) may have been the mutual fund industry’s greatest marketing innovation. Back in the 1980s, it wasn’t unusual for funds to be sold with front-end loads of 5% or more. Then...
View ArticleThe Powerful Pull of Possibility
If the evidence in favour of passive investing is so strong, why isn’t the strategy more popular? I hear that question all the time, and there are several answers, including effective marketing by...
View ArticleThe Failed Promise of Market Timing
I’ve long believed the most difficult part of being a Couch Potato investor is resisting temptation. Index investors are asked to be content with market returns, but they are bombarded daily by fund...
View ArticleWhen the Smart Money Does Dumb Things
Investors can a learn a lot from pension funds, particularly when it comes to diversification, risk management and long-term thinking. But it seems professional money managers are not immune from the...
View ArticleHow One Investor Found Inner Peace
Most people who embrace index investing are attracted to the low fees and the proven performance compared with a majority of active strategies. But another advantage sometimes gets overlooked, and...
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