Asset Allocation depends on Risk Tolerance Risk Tolerance and Asset Allocation are tied at the hip and depend on age and recency bias. How you understand risk—and how you balance the stock/bond proportion in your portfolio—is the most important decision […]
Don’t Hedge Your Retirement Portfolio Never hedge your retirement portfolio! This is one risk you must control without a hedge. Why is “hedge” the riskiest word in investing? Because it demonstrates that you don’t understand risk. If you are […]
Selling Your Winners: Tax Strategies What are some strategies for selling your winning equities? If you have highly appreciated equities, what should you do with them, considering tax strategies? It is a common problem, as people sell their losers and […]
Evolutionary Investing- The Adaptive Market Hypothesis The Adaptive Market Hypothesis is a concept from evolutionary investing. The stock market isn’t efficient. But it isn’t entirely random, either. The efficient market theory is derived from the ideal that Homo economicus […]
Mandelbrot, Chaos Theory, and The Misbehavior of Markets Stock market returns are not just random—they are randomly random. That is, stochastic. While I love the word stochastic, it and Chaos Theory are poorly understood by ordinary people. This is […]
Rick’s ideas on the Education of an Index Investor.
What Was I Thinking When I Bought Crytpo? Note- This was originally published in June 2022 and updated in July 2023 I recently bought three different cryptocurrency coins. I don’t have custody of them, neither hot nor cold. But […]
Behavioral Finance and Behavioral Investing Behavioral finance studies how to systematically take advantage of errors caused by human thinking and emotion. Behavioral investing, on the other hand, aims to cash in on the irrational investor. How is behavioral finance different […]
Choose your Results When Investing How would you like to choose your results when investing? As it turns out, we all do! It is a common bias called the outcome bias. Also known as “resulting,” the outcome bias is […]
