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Warren Buffett’s Famous Bet

Warren Buffett

In last month's article, we addressed the topic of active vs. passive management. Specifically, we provided clear and comprehensive evidence that active management is never a prudent decision. Today, we'd like to elaborate on this topic by relaying the story of a famous bet made by the greatest investor of all time - Warren Buffett. Mr. Buffett shares our perspective on this issue, and in typical fashion, made a large wager to prove his point.


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Posted in: Fees Index Funds Investing Basics Investment Insights Stocks

Why You Should Never Invest in Mutual Funds

Piggy Bank With Black Eye

Mutual funds have long been a staple for investors, offering instant diversification and the prospect of having a professional money manager in charge of your portfolio. But changes to the structure of investment vehicles, specifically the introduction of exchanged-traded funds (ETFs), have rendered the old-school mutual fund obsolete.


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Posted in: Expenses Index Funds Investment Insights Mutual Funds Taxes

Why You Should Look Forward to Market Declines

Frightened Man

We all have a natural inclination to want the stock market to move higher. But counterintuitively, for the vast majority of investors, lower market prices will actually lead to higher account balances down the road. There are of course some exceptions, but more than likely you're about to find out why you've been spending your whole life hoping for the wrong outcome in the stock market.


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Posted in: Asset Allocation Investment Insights Psychology Retirement Stocks

The Risk-Return Trade-Off

Balancing Rocks

With each and every investment that you make, you're going to be giving up one benefit in exchange for another. Most of the time, this trade-off is between risk and potential return. Understanding this trade-off at a conceptual level will go a long way in helping you to select the right investments (or strategies) on your path to retirement.


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Posted in: Bonds Investment Insights Risk Stocks Volatility

Basic Probability Theory

Basic Probability Theory

The unfortunate reality is that nothing in this world is certain. In fact, the only thing in life that is certain ... is that nothing is certain. This is especially true when we talk about money and investing. Since we can't deal with certainties, we're forced to deal with probabilities. Therefore, probabilities become the lens through which we must view all things investment related.


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Posted in: Behavioral Finance Investing Basics Investment Insights Psychology Risk

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