Robo Advisor Performance: Beware Hypothetical Returns

Beware Robo Advisor's Back-tested Performance

Geoff Considine

-+*Robo advisors have been getting a great deal of press and the rate at which they are attracting new clients and growing assets under management is impressive.  One topic that I have seen nothing written about is how these firms show the historical performance of their strategies to potential investors. When you look at a… Read More


6 Reasons Why You Don’t Want to Invest Like a Professional Trader

Stock market analysis

Kateri Young

-+*As everyone with a computer knows, the web is shoulder-deep in brokerages, services, and publications that promise to help you invest just like the pros. That’s no surprise. It’s a logical step in the democratization of information. On a technological landscape where anybody can become a self-made journalist, filmmaker, or detective, what’s stopping anyone from… Read More


Is My Portfolio at the Right Risk Level?

Return and risk balance concept

Geoff Considine

-+*This is the fifth installment in our series on how individual investors can assess their financial health. At every stage of investing, you should periodically ask yourself how much risk you can realistically tolerate. The primary way to measure the risk level of your portfolio is to look at its allocation of stocks vs. bonds. … Read More


Low Beta Market Sectors

Geoff Considine

-+*With U.S. equity markets near their record highs and a bull market run that is starting its sixth year, the potential for a correction is a growing concern.  In addition, U.S. equity prices look fairly high when viewed in terms of the PE10 ratio.  Another factor that concerns some market watchers is that volatility (as… Read More


Is Twitter the Canary in the Coal Mine?

Geoff Considine

-+*Investors are shrugging off the suggestion that stocks are over-valued or that the technology innovators are a one-way path to riches if the year-to-date performance of Tesla Motors (TSLA) and Facebook (FB) are any indication. Twitter’s stock (TWTR), which soared from a $45 closing price on its first day of trading (November 7, 2013) to… Read More


Economic Inequality

Geoff Considine

-+*Income inequality is increasingly acknowledged as a key economic issue for the world.  The topic is a major theme at Davos this year.  Economic inequality is also an increasingly common topic in U.S. politics. A new study has found that economic mobility does not appear to have changed appreciably over the past thirty years, even… Read More


Perpetually Out of Step

Geoff Considine

-+*There is increasing evidence of big flows of money into equities and leaving bonds.  This is being seen at all levels in the market, including among institutional investors such as pension plans.  The Wall Street Journal just published an article discussing this shift called Are Mom and Pop Heading for Wall Street?   Mutual fund flows… Read More


Top Ten Ways to Deal with Behavioral Biases

Robert P. Seawright

-+*Pretty much since the day I wrote it, my Investors’ 10 Most Common Behavioral Biases has been the most popular post on this blog.  It still gets a surprising number of hits all these months later.  Due to the pioneering work of Daniel Kahneman and others, nearly everyone in the financial world acknowledges the reality… Read More


Game Theory, Behavioral Finance, and Investing: Part 1 of 5

Geoff Considine

-+*Watching the market this year has been like observing an exercise in game theory and behavioral finance, and the two fields are closely related.  Game theory is the study of how a rational person makes decisions in uncertain situations.  As the name suggests, game theory was developed with the intent of developing optimal strategies in… Read More