The Benefits of Taking the Long View

July 31, 2014

I'll be out of the office for a few days, so I'm revisiting some of my past posts. (Today's originally appeared last July.) 

Last night, I took my wife out to No. 9 Park—a very nice restaurant in Boston—to celebrate our 10th anniversary. Among other things, we talked about where we were 10 years ago, and how much has changed.

As we spoke, it occurred to me that we rarely have this type of conversation—one that covers longer periods of time rather than just what's happening right now. When you look back over a decade, events that once seemed so important may become less so, while things that seemed insignificant may turn out to be major.

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A Look at Some Worst-Case Scenarios (and How to Prepare for Them)

July 30, 2014

I'll be out of the office for a few days, so I'm revisiting some of my past posts. (Today's originally appeared in May 2013.) 

Recently, an advisor called into the Commonwealth office seeking help with a client who has a nine-figure net worth and fully expects the world to end. As I thought about how to address his concerns, I realized we needed to define the problem: what would the end of the world actually look like from an economic/financial perspective?

Here’s my take on how a doomsday scenario might evolve —and what to do if you're worried about it.

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Where to Put Your Money: What’s Wrong with Cash?

July 29, 2014

In Thursday’s post, I recommended slowly prepaying your mortgage as one way to put your money to work effectively. I also mentioned that people tend to underestimate the value of cash. Today, I want to delve into that a bit more, by comparing how sitting on cash stacks up with investing in bonds or stocks in the current environment.

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Fall Preview: Politics and Policy Return to the Fore

July 28, 2014

Summer is usually a quiet time on the economic front. This year, we’ve had more news than expected—Russia and Ukraine, Iraq and ISIS, Israel and Gaza—but the general mood has been one of torpor, at least here in the U.S. Economic news has been mixed but generally positive, politics has stayed off the front pages, and the headlines have focused more on the summer than the fall.

As we enter August, though, it’s time to start thinking about issues that will come back into focus when everyone returns from the beach. 

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When Views Differ: Wall Street Vs. Main Street

July 25, 2014

I was lucky enough to have lunch yesterday with the chief market strategist for a major Wall Street bank. In addition to being an experienced and intelligent observer of the financial markets and economy, he is also a great guy.

Our conversation was a great opportunity to compare two views of the world: Wall Street vs. Main Street.

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Where to Put the Money? How About Prepaying Your Mortgage

July 24, 2014

The dilemma many investors face, when looking at today’s markets, is simple: Where can I put my money? Markets are overvalued, and bonds sure look like a bubble, but I have to do something with the cash. I can’t just let it sit there, right?

I get it, but I don’t necessarily agree that you need to do something. Many great investors see sitting on their hands when market conditions are unfavorable as a key to their success. In poker, you make your money by not betting on bad hands. The value of the optionality associated with cash is, in my opinion, underrated.

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Why Investors Should Ask "Am I Proud of This Decision?"

July 23, 2014

To follow up on my recent posts, there’s another question I’d like to ask the person (or committee) that decided to outsource Tufts University’s early education program: Are you proud of this decision? Did you go home and announce to your own family what you had done? If the answer is no, what does that say about the quality of the decision?

This is also an important question to ask yourself in an investment context.

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USA Today, 6/29/14

Stocks Fall 0.1% on Hawkish Talk From the Fed
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Certain sections of this commentary contain forward-looking statements that are based on our reasonable expectations, estimates, projections, and assumptions. Forward-looking statements are not guarantees of future performance and involve certain risks and uncertainties, which are difficult to predict. Past performance is not indicative of future results. Diversification does not assure a profit or protect against loss in declining markets. All indices are unmanaged and investors cannot invest directly into an index.

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