Posted by Stephen N Frank on Tue, 10/01/2019 - 11:48
Does money buy happiness? Yes and no. Researchers have found that money can increase happiness for individuals living in poverty. However, once we are above the poverty level, money doesn’t do much to promote happiness.
The Power of Adaptation
Posted by Benjamin Kyler on Fri, 08/30/2019 - 11:51
Humans are very good at adapting to our changing world. Adaptation is a change in behavior that allows us to be better suited for our current environment.
Anticipation of change is often more powerful than the long-term effect of the change itself. When we imagine a terrible event, such as being paralyzed, we imagine an awful life – no way we can be happy. But studies show many paraplegics are happy, for they adapt to their “new normal” and find purpose in their life.
On the flip side, imagining we win the lottery can produce strong feelings of euphoria. Yet, after a period of time, lottery winners are found to be just as happy (or unhappy) as they were before. They adapt to their “new normal”, and life goes on.
Sometimes We Just Get Lucky
Posted by Benjamin Kyler on Wed, 06/05/2019 - 12:58
Last month, a single bet on Tiger Woods winning the Masters resulted in a $1.2 million payout.
This was not a bet made by a wealthy individual or professional gambler. Rather, the bettor was a self-employed day trader saddled with a mortgage, two student loans and two car loans. He describes himself having a background in finance and considers himself “a responsible guy.”
I don’t know how responsible it is when someone in significant debt places an $85,000 bet on a single outcome. What would cause “a responsible guy” to do something so risky?
What's Your Number?
Posted by Stephen N Frank AIF® on Wed, 05/01/2019 - 10:35
In the financial world someone may ask you, “What’s your number?” Odds are they aren’t trying to pick you up. Rather, they are referring to the amount of money in which you achieve financial independence (aka retire).
Defining such a number is essential in financial planning. It provides the basis for how much you need to save each year, what kind of investment returns you need to achieve and how many years until you can retire
When Smart Money Isn't So Smart
Posted by Stephen N Frank AIF® on Mon, 03/04/2019 - 11:53
We often hear pundits on TV talking about what the “Smart Money” is doing. Who are these smart people? What makes them so smart? And if they are smart, what are we?
What's Not Going to Change
Posted by Benjamin Kyler on Thu, 01/31/2019 - 13:24
Change. We spend much of our time thinking about, predicting and anticipating it.
Several years ago, the founder and CEO of Amazon, Jeff Bezos, turned the question of change on its head. He said it is more important to consider what will not change. In other words, what are some fundamental truths we can rely upon?
A Reliable Forecast for 2019
Posted by Stephen N Frank AIF® on Thu, 01/17/2019 - 17:05
Before I get into my market forecast for 2019, I want you to consider why forecasts are so alluring to investors like ourselves. What is the force that influences us to make decisions based on forecasts? There is ample evidence that expert forecasts are correct only half of the time, yet we are still attracted to them. Why?
The Costanza Investment Strategy
Posted by Stephen N Frank AIF® on Wed, 11/07/2018 - 12:56
Originally posted on Fri, 09/28/2018
Seinfeld fans love the irrationality and craziness of George Costanza; many of us can relate to some of his antics. While he may be crazy, he has given investors some great advice on how to be better investors. He didn’t give any explicit advice, but he taught us about human behavior, and how our responses can help or hurt us as investors.
Time - Friend or Foe?
Posted by Stephen N Frank AIF® on Wed, 11/07/2018 - 12:54
Originally posted on Tue, 09/04/2018
Time is something we have very little control over, and yet complete control over. We cannot extend time nor can we shorten it. Yet, we have complete control over the consequences of its use. How we employ time can be a significant contributor whether we are happy or miserable.
Strengthening Your Investment Conviction
Posted by Stephen N. Frank AIF® on Wed, 11/07/2018 - 12:50
Originally posted on Thu, 08/02/2018
One of the biggest detractors to investor performance is a lack of conviction. We may have an investment strategy, and may even feel strongly towards it. But is that conviction circumstantial, or is it based on sound principles?