For as long as I can remember, there has been a myth that investors must reduce their exposure to stocks and increase their exposure to bonds as they approach retirement. This advice is based on the fallacy that if one is exposed to the stock market and we have a bear market (as we do today) at or close to one’s retirement, then his retirement will be forever impacted. That is wrong.
As our economy slows and inflation remains stubbornly high, one must wonder if we will ever learn our lessons. We have been here before and we know what causes this, yet here we are once more. We did not learn the lesson of the 1970s; but why?
Where did inflation come from? It came from policymakers simultaneously stimulating demand through government handouts, while also attacking supply. Inflation will not go away until this is reversed. There is more than one right way, but that doesn’t mean there is no wrong way. The current path is wrong, and the faster that is realized by people of all political perspectives, the better off we will be.
Seize the Day. This may be a strange thing for someone in my profession to say, but life is the thing you miss out on while you sit home making plans. I know: Iron Capital, like most of our competitors, does comprehensive financial planning. Our longtime readers will know that I also despise that term. I…
When it comes to investing there are lots of psychological traps into which investors fall. These traps cannot be avoided, but we can be aware of them. Knowing that we are human and subject to the human psychological traps can help us remain humble and self-aware. We can’t avoid the traps, but we can recognize when we are in one and think our way out of it.
