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Protecting Against Inflation: Evaluating Inflation Hedge Misconceptions and Strategies

Date09 Jun 2014

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The financial media are full of conjecture about which strategies might effectively hedge inflation risk or not. Here we explore which asset classes, if any, have been effective at protecting against inflation risk. First, it is helpful to address some common logical and analytical misconceptions about hedging inflation risk. Focus on Correlation, Not Volatility When...

How to Master Your Finances

Date09 Jun 2014

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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...

The Knockout Punch In The IRA Grudge Match

Date09 Jun 2014

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There’s an ongoing battle in the financial realm pitting the Roth IRA against its older cousin, the Traditional IRA. Most of the debate, however, is rendered irrelevant because it doesn’t consider the Traditional IRA’s fatal flaw. Tale of the Tape: The IRA debate is almost entirely about taxes. As long as you meet certain income requirements,...

It’s Easy to Forget About Risk in a Stable Market

Date09 Jun 2014

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Stability itself is destabilizing. This is one of the defining ideas of the economist Hyman Minsky. And it matters because when we have periods of relative stability or happy results in the stock market (like now), we start to tell ourselves little stories. For example, we might believe that the stock market will behave like...

Protecting Against Inflation: Evaluating Inflation Hedge Misconceptions and Strategies

Date09 Jun 2014

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By Jared Kizer The financial media are full of conjecture about which strategies might effectively hedge inflation risk or not. Here we explore which asset classes, if any, have been effective at protecting against inflation risk. First, it is helpful to address some common logical and analytical misconceptions about hedging inflation risk. Focus on Correlation,...

Why Do Investors Keep Buying Actively Managed Funds?

Date09 Jun 2014

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An overwhelming body of evidence shows that actively managed mutual funds underperform their appropriate risk-adjusted benchmarks. In addition, little to no evidence points to persistence of performance beyond the randomly expected, which means past performance isn’t prologue. That’s the reason for one of the great puzzles in finance: Why do investors continue with such great...

From the Sharpie of Carl Richards: A Great Source of Happiness

Date09 Jun 2014

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Carl Richards, director of investor education for the BAM ALLIANCE, explains in his book The Behavior Gap on the difference between financial planning and life planning: “I spend a lot of time talking and writing about worst-case scenarios: investors behaving badly, people losing their retirement, and so on. But let’s not forget why we’re so...

Happy in Retirement: The Power of Planning

Date09 Jun 2014

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A recent Northwest Mutual study shows a connection between being a disciplined financial planner and being happy in retirement. The study shows that highly disciplined planners — those who know their goals, have detailed plans to meet them and don’t deviate from those plans — are more likely than non-planners to say they are “happy...

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