Investor pyschology

The Only Benchmark that Matters

What is true wealth? Answer:  Funding your contentment and the ability to underwrite a meaningful life. Brian Portnoy magnificently explains this in his new book, The Geometry of Wealth. He answers one of life’s eternal questions:  Can money buy happiness?  Yes, but Brian has an important caveat. “It’s only those who have calibrated their own…

The Universe Doesn’t Care About Your Finances

What should terrify investors?  Trade wars, the national debt, rising interest rates, Russian spies? Nope. Entropy is kryptonite for wealth creation.  Entropy is the tendency of nature to pull toward chaos and disorder.  We can use this formula to describe it:  — or not. I prefer: “Sh*t Happens” “Whatever can go wrong, will go wrong.” “Rust never…

The Misery Index

My senior year of college wasn’t filled with the dread that some of my classmates seemed to carry.  All the “countdown” parties went on without me; I didn’t feel the need to squeeze the last bit of juice out of my carefree days as a student.  I was itching to get on with it; the…

Don’t Listen To Market Hecklers

Investors pay too much attention to things that mean too little. College athletes could teach them something about blocking out distractions. Before a 1997 Penn State vs. Minnesota football game, a Nittany Lion’s fan mercilessly heckled Minnesota’s kicker, Adam Bailey. Happy Gilmore was a popular movie during this period. The heckler spewed lines from one of…

Our House, Our Rules

Investing is difficult for most people. This doesn’t mean they aren’t smart, successful, or nice.  Nobody ever taught them. Emotions and commission-hungry financial salespeople fill the vacuum. Experience verifies this point.  We see the worst of the worst on a daily basis; don’t take our word for it, look at the data. Many advisors foolishly let clients…

Oh Behave!

Bad behavior ruins many things. This is especially true regarding investing. Stacy Rapacon wrote this neat article for grow.acorns.com on the index card I created about market crashes. “It’s not just with finance. When you make decisions based on emotions instead of facts and data, it’s not usually going to turn out well,” Isola says….

Financial Salespeople Pretend to Give Advice, We Pretend to Listen

All of our lives are filled with hidden motives; the false promises of Communism exemplify this. “They pretend to pay us, we pretend to work.” This saying summed up a system that brought poverty, starvation, and genocide to millions. Power and greed were the hidden motivations of its evil leaders; not a “worker’s paradise.” America…

When The Investment Train Is Too Crowded — Get Off!

Following the herd in life — or investing —  tends to end badly. Last night we were trapped in the transportation hell-hole called New York Pennsylvania Station. There was some sort of “signal” problem which ended cancelling 80 trains. When this happens, a nuclear chain reaction ensues. Since so many trains are cancelled, the crowd then…

Bad Medicine for Your Portfolio

“I love agitation and investigation and glory in defending unpopular truth against popular error.” – President James A. Garfield Less is more in making decisions regarding your investments. This can also be the case in many other fields. Candice Millard, author of Destiny of the Republic, points this out regarding the medical care of President James Garfield after…

How To Domesticate the Untamed Investor

“We tend to seek easy single factor explanations of success. For most important things though, success actually requires avoiding many separate possible causes of failure.”  – Leo Tolstoy In order to be happy you must succeed in many different ways. This is commonly known as the Anna Karenina principle from Tolstoy’s famous novel. Though Tolstoy…