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Investors Deserve a Mea Culpa From Financial Journalists

US News

When will financial journalists draw a line between entertainment and information? According to a new book, people subconsciously shut off the part of their brain when watching some financial news shows. The book, “Clash of the Financial Pundits,” co-authored by Jeff Macke and Joshua M. Brown, is a fascinating insight into the real agenda of…

Investors, Listen to Einstein: Stop Repeating These Mistakes

US News

If insanity is doing the same thing over and over and expecting different results, investors are insane. The way many investors manage their money seems to perfectly describe Albert Einstein’s definition of insanity: Doing the same thing over and over again and expecting different results. Here’s what isn’t working: trying to predict when to enter…

How to Be Happier in Retirement

US News

Much of what is written about retirement planning focuses on investing. I am guilty of contributing to the volume of that literature. My book, “The Smartest Retirement Book You’ll Ever Read,” discusses how to invest intelligently so that you can retire with dignity. I certainly don’t mean to trivialize the importance of careful financial planning. Without such…

The Powerful Psychology Undermining Your Returns

US News

There can be little dispute over the sad state of returns for many investors. My colleague at the BAM Alliance, Carl Richards, used Morningstar data to note this disturbing fact: The average U.S. stock mutual fund had a 10-year average return of 8.18 percent at the end of 2013. The average investor only earned 6.52…

How to Profit From the Coming Correction

US News

In November 2013, I wrote an article in The Huffington Post, addressing the phony “debate” among pundits over a possible market correction. The Dow Jones Industrial Average closed that day at 15,967. On July 7, 2014, it closed at 17,024. In that article, I railed against the “gurus” then making predictions about when the inevitable market…

Don’t Pay Any Mind to Financial News Gurus

US News

It has long been my view that much of what passes for “financial news” is little more than an infomercial for the securities industry. It also serves to feed the egos of self-confident pundits, who feed viewers a daily grist of musings that often include predictions about the direction of the markets, the possibility of inflation…

Your 401(k) Plan May Provide a False Sense of Security

US News

The 401(k) landscape is definitely improving. But with this improvement comes a new danger: Your plan may be giving giving you a false sense of security. According to a report on 2013 defined contribution plan data, “How America Saves 2014,” recently published by Vanguard, more than 88 million Americans participate in defined contribution plans. The…

Connect These Dots to Try to Improve Your Returns

US News

Sometimes it’s necessary to piece together seemingly unrelated news items to come up with an intelligent, evidence-based plan for investing. This was definitely one of those weeks. Here are three such news items. By connecting the dots, you may be able to improve your returns: Dot No. 1: The odds against picking “winners.” Recently, an investor explained…

The Other Side of the Advisor Fees Discussion

US News

A recent article by Motley Fool took dead aim at the cost of working with a financial advisor. The title says it all: “The Invisible and Brutal Cost of Using a Financial Advisor.” The premise of the article can be summarized as follows: 1. A hypothetical advisory fee of 1 percent of assets per year significantly reduces…

This Mantra Will Change How You Invest

US News

Few can forget the iconic phrase in the movie “Jerry Maguire,” when Tom Cruise says, “Show me the money!” Here’s a similar mantra that will change the way you invest: “Show me the evidence!” A cursory review of what passes for “financial advice” demonstrates the importance of following this mantra. Here’s a sampling: Pimco’s advice. Virginie…

Sharp Practices Can Hurt Your Returns

US News

I’d like to share with you a quick primer on fraud. You can engage in fraud by intentionally misrepresenting a “material fact,” knowing it is false and that the person to whom it is made will rely on it. If I am selling you my home and tell you it recently passed a termite inspection,…

How to Master Your Finances

US News

Paul Lem, a medical doctor, scientist and entrepreneur wrote an extraordinary book, “Master Life Faster: How To Be Happy, Healthy, Wealthy, Smart and Social” in 2008. I met Dr. Lem during a recent speaking tour for my own book in Ottawa, Ontario, where he gave me a copy of his book. I confess to having a bias…

Avoid Supporting Your Fund Manager’s Lavish Lifestyle

US News

Some things never change. In 1940, Fred Schwed wrote a humorous book called, “Where Are the Customers’ Yachts?” It was about the dichotomy between the lavish lifestyle of those who manage money and the far less glamorous struggles of those whose money is being managed. In 2006, Paul Farrell noted in a MarketWatch blog post that more…

4 Alternatives to Reverse Mortgages

US News

You may be all too familiar with commercials featuring folksy celebrities explaining how everyone tells him that reverse mortgages sound “too good to be true,” but there isn’t a catch this time. You can have the best of both worlds: You can stay in your home and get cash for the equity you have built…

Investors Should Look Out for Conflicts of Interest

US News

In his new book, “Negotiating Your Investments,” Steven G. Blum discusses some of the traps investors confront when they seek financial advice. This book contains a wealth of helpful information, but I am going to focus on two areas of particular interest: conflicts of interest and asymmetric information. They are inextricably intertwined and present formidable…

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