Spring Ruminations
My latest quarterly ramblings to my Financial Professionals list are out: Financial Professionals Spring 2026
Asset Location
Occasionally a client asks why their retirement accounts have so much in bonds or, equivalently, why the return on that account is lower than their taxable account. This question came up again recently so I thought I’d take the opportunity to explain here. This is going to be slightly oversimplified, but only slightly. Which investments …
Trump Accounts
Full details on these new accounts are here, but it appears they are usually inferior to other options such as 529s, 2503(c) trusts, and custodial accounts when funded by parents (or grandparents, etc.). However, they may make sense (individual facts and circumstances need to be considered) for: The free $1,000 from the government for a …
Winter Ruminations
My latest quarterly ramblings to my Financial Professionals list are out: Financial Professionals Winter 2026
Qualified Plan to IRA Rollover Analysis
Factors in the decision can be divided into major (almost always important) and minor (rarely important). Major Factors: Investment Fees – qualified plan options are almost always more expensive than the best options available through an IRA. Advantage: IRA Rollover (at worst a tie) Investment Quality – “quality” refers to considerations such as, but not …
Risk Tolerance
Many firms use “risk tolerance” questionnaires to determine this for their clients, but a client’s risk tolerance isn’t a static measurement like their height; it varies over time. “Risk tolerance” is a terrible term because it encompasses three different factors: Risk capacity – how much risk the client can afford to take. Risk propensity – how much …
Fall Ruminations
My latest quarterly ramblings to my Financial Professionals list are out: Financial Professionals Fall 2025
Tax Opportunities
I know you have probably heard far too much about taxes lately and I am not going to review the recent tax bill here. I want to talk about tax strategies more generally. “No man’s life, liberty or property are safe while the Legislature is in session.”– Gideon J. Tucker, 1866 While many people spend …
Three More Mental Mistakes
Recently (here) I discussed two common mental mistakes. This month I thought I would add three more: a need to save face, improper extrapolation, and conscious weakness. Saving Face. What I have termed “saving face” is an attempt to not feel stupid, or to avoid regret. People can go to elaborate lengths to feel they …
Summer Ruminations
My latest quarterly ramblings to my Financial Professionals list are out: Financial Professionals Summer 2025
Two Mental Mistakes
Most of us are prone to systematic errors in our decisions, and I would like to review two of them that seem to come up frequently. (For more, see here and here.) The first issue is sunk costs. A sunk cost is something that is already spent or some action already taken. The logical error …
Why We Don’t Invest in Alts
“Alternative” investments (aka “Alts”) are probably best defined as investments that are anything other than stocks or bonds (and cash is just a bond with a really short duration). A few years ago, I got the CAIA (Chartered Alternative Investment Analyst) designation, and I also attend alternatives conferences periodically to be well informed. I went to another …
Spring Ruminations
My latest quarterly ramblings to my Financial Professionals list are out: Financial Professionals Spring 2025
Life Planning Questions
This month we are going to take a break from our usual technical topics, and discuss a more fundamental issue. What is the point of all this planning and analysis? To amass the largest investment portfolio possible? NO. It is to reach your highest goals and aspirations. The problem is that many people don’t have …
Important vs. Urgent
Steven Covey, in his excellent book Seven Habits for Highly Effective People, uses a simple graphic to categorize activities. All activities can be categorized as important or unimportant, and urgent or not urgent. Dwight D. Eisenhower (quoting J. Roscoe Miller) once said in a speech, “The urgent are not important, and the important are never …
Winter Ruminations
My latest quarterly ramblings to my Financial Professionals list are out: Financial Professionals Winter 2025
P&C Insurance
We do not sell property and casualty insurance (auto, homeowners, etc.) but we review it because inadequate insurance could thwart the best of investment strategies. This month I will focus on an oft-neglected corner of financial planning and give you a few tips on that most boring of topics, your property and casualty insurance. The …
Who Knows?
I wrote the following to our clients the morning after the election, but thought it was worth sharing more broadly here: All, Last night and this morning as I watched and thought about the election results, I was reminded of a Chinese parable from the second century BCE. Here is the translation of the fable …
Fall Ruminations
My latest quarterly ramblings to my Financial Professionals list are out: Financial Professionals Fall 2024
Efficient Markets
As wealth managers, we are frequently asked some variation of the question “So, what do you think the market is going to do?” or “What do you think of XYZ stock?” Those are difficult questions to answer, and this month’s post is an attempt to explain our perspective. The reason that those questions are problematic …