Isaac Presley via Enterprising Investor: Good Financial Adviser/Bad Financial Adviser “Good advisers know when to say “no” and have the courage to stand on principle. Bad advisers take orders from clients, even when those orders may be damaging to their long-term financial well-being, just to keep them with the firm.”
The Reformed Broker: The Best Hedge There Is “The best hedge there is? Not taking risks you don’t need to take.”
Epsilon Theory: Too Clever By Half “That’s it. There’s nothing new under the sun. Finding new ways to trade things (securitization) or new ways to borrow money on things (leverage) is what financial innovation is all about, and there are vast riches awaiting the clever coyotes who can come up with a useful scheme on either.”
Of Dollars and Data: Cutting The Gordian Knot “This brings me to what I consider to be the most difficult problem in all of finance. No, I am not talking about the stock market. I consider that problem unsolvable for a variety of reasons. The most difficult problem in finance is yourself. The Gordian Knot is your mind.”
Fervent Finance: Outsourcing “Think about what you would do with that time you would be freeing up. If you will just “waste” it, however you want to define that, then maybe you should think twice about outsourcing a task.”
Bps and Pieces: This Is The Normal Part “Despite the grey bars being positive in 29 out of the 38 years provided (and that’s before taking into account reinvested dividends!), you can clearly see that almost every one of those positive years experienced drawdowns of at least five percent. In many positive years, the drawdowns were at least ten percent, and in some greater than twenty percent.”
A Wealth Of Common Sense: The Drawbacks Of Behavioral Finance During Market Corrections “The whole point of the field of behavioral psychology was to disprove the idea that humans are rational agents acting in their own self-interest. We’re not robots but humans who are flawed (this is obvious but many in the field of economics didn’t account for this idea for a long time).”
Tweet Of The Week
You will hear a ton of opinions today about market corrections and crashes.
Remember that the only thing on Wall Street that never suffers a bear market is: pic.twitter.com/NmGCrlRcEC
— Jason Zweig (@jasonzweigwsj) February 6, 2018
Disclaimer: Nothing on this blog should be considered advice, or recommendations. If you have questions pertaining your individual situation you should consult your financial advisor. For all of the disclaimers, please see my disclaimer page.