I’ve never been a fan of financial planning rules of thumb. To see why, consider a common shortcut for choosing an asset allocation: The allocation to bonds in a portfolio, according to this rule of thumb, should equal an investor’s age. For example, if an investor is 65 years old, then his [...]
The three landmines of personal finance
Scott Adams, the creator of Dilbert has this to say about making forecasts: “There are many methods for predicting the future. For example, you can read horoscopes, tea leaves, tarot cards, or crystal balls. Collectively, these methods are known as ‘nutty methods.’ Or you can put well-researched [...]
Another truism of financial planning
At least once a day, I find myself saying, “Another truism of financial planning is...” To be honest, I don’t know if they meet the strict definition of truisms, but below are the twelve concepts I’ve found most helpful in navigating the world of personal finance. There are always two answers [...]
Groupthink
The economist John Maynard Keynes once made the observation that, “it is better for reputation to fail conventionally than to succeed unconventionally.” This is probably true in many realms. It’s certainly true in the investment world. As the last twelve months have demonstrated, extreme and [...]
Single Stories
In 2009 author Chimamanda Adichie coined the term “single story.” A native of Nigeria, Adichie first came to the U.S. to attend college. Almost immediately, she was struck by the one-dimensional lens through which many saw her. It started with her roommate. Knowing that Adichie had just arrived [...]
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