Investments

The philosopher Ludwig Wittgenstein once said that nothing is as difficult for people as not deceiving themselves. But while most self-delusions are relatively costless, those relating to investment can come with a hefty price tag. We delude ourselves for a number of reasons, but one of the principal causes is a need to protect our own egos. So we look […]

In a popular children’s story, the young hero pins all his hopes on finding one of a handful of “golden tickets” hidden among millions of candy bars. It seems many people approach investing the same way. The notion that the path to long-term wealth lies in locating secret and previously undiscovered treasures in the global marketplace of securities is one […]

The Chinese philosopher Confucius once said that life is very simple, but we insist on making it complicated. You could say the same thing about investing. Complexity in investing often comes with a lack of transparency. The highly engineered and multilayered financial derivatives that contributed to the global financial crisis five years ago are a case in point. For many […]

Interest rates around the world are at historic lows. They can only go in one direction from here, right? And aren’t rising interest rates bad for bond investors? The truth might surprise you. Central banks in developed economies have injected extraordinary stimulus into the system since the recession arising from the global financial crisis five years ago. The stimulus has […]

Professor Eugene Fama of the University of Chicago was recently awarded the Sveriges Riksbanks Prize in Economic Sciences in Memory of Alfred Nobel for 2013. Professor Fama began his work in the 1960’s and is considered the “father of modern finance” as well as the creator of the “Efficient Market Hypothesis.” Professor Fama demonstrated that stock prices are extremely difficult to predict and […]

The stalemate over the federal budget and debt ceiling in Washington, D.C. has put the markets on edge and generated a lot of scary headlines. We are following events very closely, but we can make no certain prediction of the short-term outcome. We do know that if Congress does not raise the debt limit by Oct. 17 a technical default […]

Stocks markets worldwide declined Monday as the U.S. government faced a shutdown due to the Congressional budget stalemate. Today, markets rose, even though the shutdown occurred.  Here are some considerations for investors: As long as this is a short-term event, it should have little economic or market impact. Political events drive markets only in the short-term; the economy and corporate profits […]