That value stocks (in particular, small value stocks) have provided higher returns for investors over time is both well-documented and well-known. So it’s no great surprise that—as director of research for The BAM Alliance, a community of more than 140 independent RIA firms—I’ve been getting a lot of questions about the recent disappearance of the…
“I have learned that success is to be measured not so much by the position that one has reached in life, as by the obstacles which he has overcome while trying to succeed.” – Booker T. Washington Occasionally, I will read a biography worth passing along to my kids. And, knowing how hesitant they are…
I love rock climbing. Looking from the ground up, it seems almost impossible for climbers to balance themselves and find handholds where none seem to exist. And sure enough, even the most talented climbers can end up getting stuck on climbs well below their skill level. I’ve done it, and I’ve seen it happen to…
By Carl Richards I’ve been surprised by a lot of things as a financial adviser. One of the biggest surprises has ended up playing a critical role in my development: the process of self-examination. It has mattered both professionally and personally, and it should to you too. Yet hardly anyone openly talks about the need…
Quick Take on Fixed Income April 2015 Q: What is the difference between a bond’s coupon rate and yield to maturity? A: The coupon rate tells you the annual amount of interest paid by a fixed income security. For example, a Treasury bond with a coupon rate of 5 percent will pay you $50 per…
It’s becoming clear that the price for overall U.S. equity market exposure is close to zero. Many market-cap weighted index funds and exchange-traded funds from Vanguard and others are charging expense ratios of five basis points (bps) or less. An interesting, and more difficult, question to answer: How much are you paying to gain exposure…
There are few occasions in life so filled with optimism—and stress—as leaving one company to join another. Regardless of how common career moves are, the tactical skill and emotional fortitude required is anything but typical. The stakes are high, and as a result, mistakes are often made. Here are three rules to follow to help…
If you’re like most Americans, you may be confused, or even paralyzed, when it comes to developing a financial plan. In fact, most investors I’ve met—including many of those who have a relationship with a stockbroker—don’t have a written investment plan, let alone an overall financial plan designed to incorporate estate planning and risk management…
Each January, I put together a list of predictions that financial “gurus” have made for the upcoming year—sort of a consensus of “sure things.” I then keep track of whether or not these “sure thing” predictions have actually come to pass. The turn of the calendar into April means that it’s time for our first…
As it has been so frequently noted in the financial press, last year the U.S. dollar appreciated significantly against most foreign currencies, including the widely quoted benchmark euro. For investors with a portion of their portfolio in unhedged international stocks, this caused some short-term pain. For illustrative purposes, let’s expand the discussion beyond the euro…
As a regular contributor to The New York Times and the author of two books, Carl Richards knows the value of a good story. Here’s one he loves. It comes courtesy of Ron Lieber’s new book, The Opposite of Spoiled. Lieber, who also writes a personal finance column for the Times, wrote in his book…
We tend to think in the short term, but it hampers our ability to invest intelligently. In order to invest successfully, you need to be skilled at decision-making. This is true if you are a do-it-yourself investor or if you rely on recommendations from your financial advisor. The many decisions you must confront include whether…
During the years I worked as a buy-side equity analyst and an institutional portfolio manager, the first item I would always examine in an earnings report were the footnotes. That’s where all the truly juicy information appeared, and it never ceased to amaze me how many folks skipped right over them in the go-go-go days…
“Can it really be that simple?” Over my career, I’ve heard these words from so many people. Clients, friends and family all just assumed that the process of financial planning needed to be complex. This assumption doesn’t surprise me. The traditional financial industry is built, in large part, on the notion that complexity equals quality….
Recent events have led me to conclude that, at least in some ways, the U.K. is ahead of the United States when it comes to investing. The first—and by far the most important—reason I have for drawing such a conclusion is that in January 2013, all licensed financial advisors in the U.K.were required to become…