One of my particular interests in investing is how to make better decisions. I’ve written before about biases and problems we face, and much of the current research is in fields such as behavioral finance, with a focus on how to avoid mistakes that seem to be hardwired into our brains.

We talked the other day about slow failure in investing, when a portfolio simply can’t generate the expected returns over time. Although investors may do well on average, the mismatch between expected returns and actual results can spell failure for some who are in the market at a poor time.

Once again, we’ve hit the federal government’s borrowing limit. Having maxed out its credit card with the bond markets, the U.S. government is now pursuing the “usual emergency measures” while waiting for Congress to approve an increase in the debt limit.

We’ll probably be hearing about this, at high volume, for quite a while—and, based on past experience, right up until the last minute—so it’s worth understanding what is likely to happen.

Yesterday, we talked about the two kinds of investing failure: slow failure, where returns over time are too low to meet goals, and fast failure, which involves a sudden drawdown or loss. We’ll focus today on slow failure, as it’s the more insidious risk (and one that most people don’t think about in sufficient depth).

As I mentioned yesterday, investment risk is often measured against the investments themselves, and for good reason. Too often, though, these measures don’t really capture the risk that individual investors face.

Today, we’ll talk about what risk really is, in an individual context, and start to think about what that means for measuring risk and constructing portfolios to avoid it.

Discussing returns over the next 10 years the other day, I closed with the thought that averages aren’t the best way to express how portfolios may perform. We will certainly talk about that today, but it’s emblematic of a much bigger problem: how we measure risk.

Once again, it’s time for our monthly update on risk factors that have proven to be good indicators of economic trouble ahead. As expected, the data hasn’t changed much from last month—it remains positive in almost all areas and has continued to improve in many cases—but it’s still important to keep an eye on things.

As we continue into the year, though, the economic forecast remains promising.

As a follow-up to my post from last week, on the likely returns from bonds over the next five to ten years, I thought I’d extend that discussion to portfolios as a whole.

When we look at investment returns, we have a time-horizon problem. People in general aren’t very good at evaluating more than a year or so in each direction.

This week, I gave a talk at the Commonwealth Leaders Conference where I laid out what I thought was a pretty compelling argument for a continued and strengthening recovery. The problem with arguments like this, especially if you’re taking a position, is that the facts can blow up in your face.

To finish up the discussion of the economic context of net neutrality that I started in Monday’s post, let’s take a look at the second half of the issue. Monopoly power, which I discussed in yesterday’s post, is a problem—but maybe a short-lived one. If you take away the monopoly part of it, is charging more for some users really all that bad? Not really.