Two Ways to Build and Preserve Wealth

For all of the chatter coming out of the financial industry about building wealth, I continue to believe that two of the best methods for individual investors are process and automation. The likelihood of success is enhanced when a good process is put in place and automation is used when it is both reasonable and…

 

Portfolio Optimization Isn’t Necessarily Worth the Effort

A few weeks ago, I offered a list of what assets an individual investor needs to hold in their portfolio. Second in order of importance on my list—behind stocks, bonds and cash—were REITs (real estate investment trusts). These real estate investments offer a dual benefit of diversification and favorable returns. I bring this up because…

 

Successful Investing Requires Coping With Some Discomfort

“Super investors take pain better than everybody else.” Wesley Gray, CEO and CIO of Alpha Architect, made this observation at last week’s Financial Analysts Seminar, an annual CFA Institute event hosted with CFA Society Chicago. He was referencing the ability of successful investors to stick with a strategy. Gray raised the point as part of…

 

Too Much Complexity Isn’t a Good Thing

A year ago, I began including doodles with my weekly commentary. The first one was a sketch discussing the impact of changes in earnings forecasts on stock prices. The purpose was to visually highlight and graphically explain one of the points I was making. Being a writer who thinks in terms of communicating by text…

 

A Rules-Based Approach to Managing a Portfolio

A prelude to this week’s commentary: BlackRock made financial news headlines by announcing a change in how some of its active mutual funds will be managed. Rather than rely on human stock picking, the company is shifting to a heavy reliance on quantitative strategies. Commentary about the change was quick to use the word “robots”…