The Quilt That Keeps on Covering a Diversified Investor
What a difference a year sometimes DOESN’T make. For several years now, we’ve been tracking the annually updated random returns that comprise what is known as “the crazy quilt chart.” Here are this year’s results:
The Crazy Quilt Chart Update
To review how the chart works, each color represents an “asset class,” or a long-term source of expected market returns. By stacking each column/year...
The price of financial illiteracy is steep
In Magna Cum Lousy, Tony Isola laments that we are failing our children by not educating them about personal finance.
“Imagine: you give a teenager access to car keys when they have never driven a car or taken Driver’s Education. You simply tell them to drive carefully and you hope for the best. That would be setting them up for failure, and yet, we do...
A retiree owned too much company stock
“Retirement looked pretty good until GE shares collapsed.” (Wall Street Journal, 4/22/2018)
Additional Reading: We Only Get to Experience One Version of Reality (The Reformed Broker, 4/23/2018)
An early retiree misses their old working life
What if I’m wrong about everything? (Thriftygal, 4/18/2018) “What if happiness is more about roots and people and relationships and productivity and less about freedom and flexibility?”
When life happens
How do you save for “retirement” if you don’t participate in a 401(k) plan?
Katie Lobosco with CNN Money writes “The good news is that there are other accounts you can open yourself that offer similar benefits. For some self-employed people, the benefits can be even better than a traditional 401(k) plan's.”
Roth IRA’s are great for kids with earned income
Kimberly Lankford with Kiplinger’s Personal Finance notes “Contributing to a...
An Exercise in Confusion: “Tuning Out the Noise”
First, take a moment to view this powerful video, just released by Dimensional Fund Advisors.
The new millennium’s biggest financial headlines
Now, before you consider the substance, how did the onslaught make you feel? Nervous? Anxious? Annoyed? Confused? Maybe all of the above!
This exercise captures exactly how most investors felt as the new millennium’s biggest financial headlines were playing out in real time. As...
The financial crisis has shaken young people’s faith in capitalism
A (financial) crisis of faith (John Paul Rollert, Chicago Booth Review, 8/10/2018)
“A spring 2016 poll from Harvard University’s Institute of Politics finds that only 19 percent of Americans between the ages of 18 and 29 identified themselves as capitalists, and 51 percent of those surveyed said they did not support capitalism. Similarly, a YouGov poll commissioned late last fall finds that,...
A Quarterly Tale of Risks and Returns in Real Time
For the first time in a long time, U.S. and international developed stock markets alike bled off some steam this quarter. You’ll see that expressed by the bright red arrows in Dimensional Fund Advisors’ first quarter Quarterly Market Review Market Summary (page 3).
While we fully expect markets will continue delivering positive long-term returns, who knows what the rest of the year...
Ideas that change how you think about the world
“You spend years trying to learn new stuff but then look back and realize that maybe like 10 big ideas truly changed how you think and drive most of what you believe.” Morgan Housel shares his list in “Ideas that Changed My Life”.
What defines you?
In “Ring Life’s Bell”, Tony Isola talks about his family’s personal experience with pediatric cancer and...
Sailing with the Tides
Embarking on a financial plan is like sailing around the world. The voyage won’t always go to plan, and there’ll be rough seas. But the odds of reaching your destination increase greatly if you are prepared, flexible, patient, and well-advised.
Here is this week’s article from Dimensional's Jim Parker: Sailing with the Tides.
SAGE Serendipity: You want to watch TV but deciding what to watch is taking more time...
Usually, our “3 Things” include – wait for it – three things. But Warren Buffett’s 2018 annual letter to Berkshire Hathaway shareholders is filled with so many interesting things that, today, we’re featuring three insights from this one source (emphasis is ours).
1. Sleeping Well at Night
“Why the purchasing frenzy [from others]? In part, it’s because the CEO job self-selects for ‘can-do’ types. If Wall Street analysts or board members urge...