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….
Summit Blog
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…
