Category Archives: strategy

Outliving Your Money: 2.279 Billion Case Studies

Outliving Your Money
It’s said that everyone has a double somewhere in the world. That seems unlikely, in the physical sense, but I bet most of us can imagine a professional doppelganger. A retired Italian physician. A French chemistry professor. An Irish engineer. Someone with a similar amount of money, living a similar lifestyle. Someone just like us in all respects except where they live. A real person that shares our same aspirations and fears.

One of the most common fears shared by people in or near retirement is the risk of outliving their money. This is the basic reason behind most saving and investing in the first place. People want to be protected from the vulnerability that comes along with being financially dependent on someone else. Unfortunately, the investment approach many people choose for their savings sometimes ends up creating the problem they were trying to avoid. Continue reading

The Strategic Investor: Part IV, Take Control by Letting Go

CC Image courtesy of Ben Stanfield via Flickr

CC Image courtesy of Ben Stanfield via Flickr

There are two recurring themes in a lot of these articles:

  1. Blind allegiance to the stock market can be dangerous.
  2. The wiring of our brains works against us as investors.

If the market wasn’t risky we wouldn’t need to worry about our faulty wiring because we wouldn’t have to make any decisions. If we were naturally suited to making good investment decisions under stress, a risky market would be less worrisome. However, the market is risky and our wiring is faulty – we need a strategy to deal with both. Continue reading

The Strategic Investor: Part III, Go Slow to Go Fast

the-tortoise-and-the-hareAesop was the author of the most tortured parable in the history of finance. Everyone knows that you’re supposed to bet on the tortoise over the hare. Slow and steady wins the race. It’s a winning message. Everyone likes the idea of steady returns. Steady feels solid.

The desire for constant action irrespective of underlying conditions is responsible for many losses in Wall Street even among the professionals, who feel that they must take home some money every day, as though they were working for regular wages.
-Jesse Livermore

Steady would be fine but, when it comes to the capital markets, it’s unrealistic. Investment markets are never permanently steady. They can be intermittently steady though. We’re coming off of Continue reading

The Strategic Investor: Part II, Hating the Win

chess-strategyThe first part of this series was about how learning to “love the loss” could provide protection, put us in front of more opportunities, unlock time and help make us more objective thinkers. The indirect strategy of gaining by losing can be extremely effective when done right. This part of the series addresses the corollary to loving the loss – hating the win. Continue reading

The Strategic Investor: Part I, Learning to Love the Loss

What was the most memorable line of the original Karate Kid movie? Probably, “wax on wax off.” Remember that? This was the part where Mr. Miyagi had Daniel painting his fence and sanding his deck and waxing his cars:

Miyagi: [Miyagi returns from fishing as Daniel is painting the house] Oh, miss spot.
Daniel: What spot? Hey, how come you didn’t tell me you were goin’ fishing?
Miyagi: You not here when I go.
Daniel: Well, maybe I wanted to go, you ever think of that?
Miyagi: You karate training.
Daniel: I’m WHAT? I’m bein’ your goddamn SLAVE is what I’m bein’ here man, now c’mon we made a deal here! Continue reading