The act of planning for your financial future is all about making tradeoffs. It’s essentially a question of dealing with the constant tension between living for today and saving for some future event. [Read more...]

One of the core concepts of Modern Portfolio Theory is the idea that investment returns are normally distributed. In other words, returns can be modeled using a bell-shaped curve. [Read more...]

I know that this is not a new idea, for we have all heard the story of the tortoise and the hare since we were little. Slow and steady always wins the race. [Read more...]

In a conversation with a friend of mine, he recalled how he only recently learned what a bond was and how it could act as an investment. He’s a 30-year-old American male with a master’s degree in Marine biology, and he didn’t really understand…[Read more...]

Never fear—I haven’t forgotten you. Things have been busy at the Behavior Gap in unexpected and exciting ways. I’ve been invited to post on a regular basis at the New York Times Bucks blog. [Read more...]

One of the biggest mistakes we make is confusing investing with entertainment. Somewhere along the line, investing became America’s favorite spectator sport. [Read more...]

I’ve been thinking a lot about fear and the impact it has on our industry–specifically, the communication strategies we use as financial advisors; the nature of our advice and the ability to do our job; and investors and the public in general. [Read more...]

A month or so ago, I sat down to review my firm’s Investment Policy Statement (IPS) and found myself asking, “What is this?” When did these statements get so useless? [Read more...]

Investor behavior matters a lot. In fact, it probably matters more than skill. To understand why this is true, first you need to understand one fundamental concept: Investment returns and investor returns are almost always different. [Read more...]

So much of what we do is intangible. We deal with the unknown all the time, and that means we need to assume things in order to make decisions. But one of the biggest mistakes we’ve made as a profession is developing a false sense of precision. [Read more...]