In Drive: The Surprising Truth About What Motivates Us, bestselling author Daniel Pink presents some of the most compelling and useful research in the field of in human motivation. One section, “The Good Life,” is particularly enlightening in regard to how we as individuals establish and pursue our life goals. Pink makes the point, and science confirms, “Satisfaction depends not merely on having goals, but on having the right goals.” One of the studies that Pink cites asked a sample of soon-to-graduate college students about their life goals and then followed them early in their careers to assess their…
Buying Ourselves the Gift of Time
Most adults are increasingly experiencing a time crunch. The result is mounting stress and compromised health and vitality. And yet, despite their best efforts, many individuals express frustration about not being able to bring tasks to completion or having enough time to focus on what or who is most important to them. Scientists have even coined the term “time famine” to describe the pervasive feeling of being overwhelmed with the demands of work and life. Studies have shown that people who frequently feel they “don’t have enough time” (time scarcity) are less happy and more prone to anxiety and depression…
Horses of Two Colors
A bit earlier today, my daughter and I were at a local mall where they offered free horse drawn carriage rides. As you can imagine by the word “free,” there was a long line so I had plenty of time to ponder things. As I was doing so, I started thinking about the two horses being an unmatched pair, but yet they were working together. This made me think about investing, because, after all, I think about that topic a lot! The brown horse appears slow and steady – the rational side of the investor. Nothing all that exotic there….
The Markets Stink. Now what?
The Markets Stink. Now what? 2018 was a pretty good year for stock market returns…. Until October. Since then we have been hit with very difficult performance. A couple of weeks ago, the US markets had regained enough ground to at least have a zero percent return. At the moment, though, returns are negative for the year. Our brains, specifically our limbic system, where all of our emotions operate, want to do something! That is the part of the brain that would compel us to run so a tiger would not eat us back in more primitive times. The…
The Psychology of Giving
Although a number of studies have focused on the effect of income on happiness, Elizabeth Dunn, a socialpsychologist at the University of British Columbia, also wanted to understand the effect of spending choices on happiness. For example, previous research clearly demonstrated that income has a predictably positive effect on level of happiness, but these levels remain flat over time even as income increased. This finding puzzled Dunn and she wanted to find out why happiness did not increase along with income. Could the reason be, Dunn wondered, that people poured their increasing wealth into purchasing consumer goods that did not provide lasting happiness? …
DFA US Large Cap Value: What, Exactly, Am I Invested In? Part 2
The US stock markets are still feeling jittery this week, although we are seeing some stabilization in the International Markets, something that rarely gets headline coverage here in the US. The media bathes us in fear inducing coverage when we experience negative returns, but let’s step back from that a bit and think about what is really happening when markets turn downwards. If people are selling, who are they selling to? There must be a buyer on the other side of the sale, or it would not be a recorded transaction at all. What has to take place in…
What, Exactly, Am I Invested In?
The stock markets were especially volatile last week. Normally volatile would refer to something going up and down, but when used in the context of the stock markets, we tend to only think about negative returns. I have written before about why holding the course and not making emotionally based decisions is best for anyone’s long term financial success, and I could do that here too. But, during a conversation with a client last week, it occurred to me that it might be better to more clearly explain exactly what our clients are invested in, and why “the markets” are…
INCREASING HAPPINESS IS A MATTER OF INTENTION
For many years, the prevailing theory was that individuals have a genetically determined happiness set point. In other words, scientists believed that each person could temporarily experience more happiness (depending on circumstances, relationships, and life events), but would then slide back to his or her “pre-programmed” set point. In fact, less than two decades ago, one researcher was quoted as saying, “It may be that trying to be happier is as futile as trying to be taller.” However, current research in the field of Positive Psychology indicates that people can become happier and the change can be long-term. …
Should You Only Invest in the US Market?
The front cover of Wall Street Journal showcased the news, “Propelled by Tech Stocks, Nasdaq Tops 8000 for the First Time”, followed by “Nasdaq Soars Past 8000 to Record” in even bigger print on the front of the Business & Finance section of the August 28, 2018 edition. To be sure, the US stock markets have been hot in recent years, despite what many have expected to happen. This is a great thing, but it may cause some to question the philosophy of global investing. Although non-US stock markets have been mostly positive for the last 12 months, they have…
Dimensional Fund Advisors – Tuning out the Noise
We are constantly inundated with headlines and noise that feed our instincts to react. In reality, a lot of the media voices we hear have little meaning for long term investors, and reacting to headlines can be the worst of moves for your long term financial success. The following is a short video clip produced by our fund family of choice, Dimensional Fund Advisors, highlighting the need to tune out the noise, and stay on track with a disciplined and informed investment philosophy.
