Short-term Sentiment, Confusion and Misguided Convictions How much time do you spend agonising over short-term economic data? Daily news flow is overwhelming and at times conflicting. As a long-term investor, to what extent does this inform or alter your long-term decisions? Markets are always looking ahead and pricing in future expectations. If the consensus expectation…
Align your Actions with your Timeframe In May 1999 Barron’s published a cover story on Amazon shortly before the tech bubble burst. In the article Jeff Bezos was rubbished as just another middleman and that the idea of him pioneering a new business paradigm was silly. We all know what has transpired over the following…
The Science of Less We confuse activity with achievement. Leidy Klotz in his book “Subtract, The Untapped Science of Less” focuses on this fascinating question: “In designing our worlds, why do we always seem to add, but not subtract?” He writes that we often start with “What should I do more off?” A better approach…
Rube Goldberg and Winning the Loser’s Game Charles D. Ellis in his best-selling book Winning the Loser’s Game suggests that individual investors will be better off by working with the markets instead of against them. Based on historical facts he argues that investors need to avoid short-term traps to concentrate on their long-term strategies. The magic ingredients…
Personal Financial Planning – Shifting from IQ to EQ Consumers weigh the perceived value of products and services against the asking price. Two components affect consumer decisions regarding products and services: What am I paying? – Price What am I getting? – Value When you lower prices your profitability goes down. It’s simple. Discounting everybody…
Real-world decisions are almost always made under uncertainty Life is uncertain. We cannot control many of the things that have an impact on our lives. Some of the most important numbers that you would like to know are unknowable in advance. We don’t have control over these numbers. How long will I live? How much…
The Paradox of Common Sense – It’s not That Common The world is complex, but the human mind seems to prefer simplicity, even at the expense of accuracy. 2021 did not feel so uncertain. Who was able to predict in 2021 that we were about to experience the worst opening 6-months for 40 years in…
The Trap of Being Interesting We all want to build an independent brand, identity, our unique value. A “why I am smarter than…” story. I have been intrigued by various conversations with well-qualified advisors over the past couple of years whose requirement for their client portfolios is that it should look different and be interesting.…
Do-It-Yourselfer or Delegator? To answer this question, you need to be aware and consider the true cost of DIY. The financial planning industry has, by enlarge, not done itself any favours in the way it framed their value and what they are being paid for by clients. The planning and advice are free, but you…
A Terrible, Horrible, No Good, Very Bad Day Inflation is at levels we have not experienced for decades. The daily volatility of markets is unnerving. Interest rates are rising. The messaging from the media is running rampant providing no comfort. We are scared and would prefer to wait it out on the side-lines. It reminds…