Posts filed under “Philosophy”
The reality is fear and greed are part of the human condition. There are however times when it appears that the greed factor is dominating — I have not yet figured out if this is a cyclical phenomena or something more insidious.
Regardless, I found this amusing:
Source: Reflections of Me
Anthony Freda/Daniel Zollinger What Would Jesus – Or the Rabbis of Old – Do? Preface: If you are an atheist and believe that religion is crazy, please remember that some 85% of the American population identifies itself as Christian and millions more identify themselves as Jewish. Very few Americans are atheists … and the…Read More
This Monday morning we reach our tenth and final installment in our series of most common investor errors.
This is a rather simple but overlooked aspect of investing — and that is making sure that when you work with any sort of professional (Lawyer/Accountant/Manager/Planner) you get your money’s worth.
10. When Paying Fees, Get What You Pay For: It always surprises me how much money some people are willing to throw at people like me to manage their financial affairs — whether its necessary or not.
For the professionals who charge by the hour (Lawyers and Accountants) avoid chatting or dawdling on the phone. When they take you out to lunch, expect tat you are actually paying the bill — either your account is charged for the tab or the time is billed. Make it business, not social.
And when retaining a financial professional, make sure your fees cover a variety of the services you actually need.
For some people, hiring a pro can make sense. If you have a more complex financial situation — perhaps you may have a complicated tax issue, or may be looking at a generational wealth transfer. These sorts of issues are often best served with a competent professional managing them.
We have lots of clients who are too busy running their own businesses and do not have the time to manage their own investments. And as noted in many of our prior points (1-9), a lot of folk simply lack the temperament and discipline to deal with stress and emotions of capital markets. If that describes you, paying someone to run your assets or at least facilitate your investing and income management makes sense.
But for many others, they might be better off simply dollar cost averaging into a group of broad indices and saving the 1-2% annual fees.
Consider what sort of help you really need, and find someone competent to assist you in your financial planning. If your needs are straightforward and simple, you might be able to do it yourself and save the fees.
1. Excess Fees
2. Reaching for Yield
3. You Are Your Own Worst Enemy
4. Asset Allocation vs Stock Picking
5. Passive vs Active Management
6. Mutual Fund vs ETFs
7. Neglecting the Long Cycle
8. Cognitive Deficits
9. Past Performance vs Future Results
Back in November 2010, I penned a piece for Bloomberg about the absurd meme circulating regarding the impact of Uncertainty. The key point was that uncertainty was an essential part of markets, and indeed life. The future is by definition unknowable and therefore uncertain. Those who complained about it revealed how little they actually understood…Read More
I very much appreciated this perspecitve offered by Dylan Grice of Société Générale: “All outcomes are caused by an underlying process. In very general terms, all we did by constraining the QI to have a 2% tracking error was impose an outcome on a process. But as soon as we did that we also changed…Read More