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.

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.

I am at the Commonwealth Leaders Conference this week, at one of the most beautiful properties I have ever seen. So, of course, I am sitting in a conference room listening to economic presentations. But I’m okay with that.

One of the great things about conferences like this one is that they offer the opportunity to listen to a group of sponsors present some of their most compelling investing ideas. I heard a very interesting point this morning that I’ve noted previously but not paid sufficient attention to: The return from bonds (in aggregate) is almost always very close to the initial yield.

I wrote yesterday about gaps opening up in the stock market, and how the tech space in particular is starting to look a lot like a bubble.

Among other things, I mentioned that the stock market isn’t in a bubble yet because companies are making money. Later in the day, though, I saw a story pointing out that 71 percent of companies that went public last year were unprofitable, the highest level since 2000 (when 80 percent weren't making money).

I hope you enjoy today’s insightful post from my colleague Peter Essele. See you next week! — Brad

“What will the market return this year?” As a portfolio manager, I hear some variation of this question at the beginning of each and every calendar year. Following the requisite exchange of pleasantries, it inevitably comes up at cocktail parties, birthday get-togethers, client meetings, and even the après-ski scene.

As we discussed yesterday, Brazil is different from the developed economies in Europe, Japan, and even China, and it presents a different kind of opportunity for investors. With an economy halfway between those of Brazil and China, and a set of advantages that both other countries lack, India is potentially an even more interesting opportunity.

Since it's a fairly quiet news day, I want to return to our "outside view" series on countries that matter around the world. So far, we’ve considered China, Europe, and Japan, but today we’ll shift gears and look at a very different country, Brazil.

Driving in Massachusetts can be confusing. South Boston, for example, is actually east of the city, while East Boston is to the north. And the road labels can be just as bad. There is a section of a major highway, where two roads converge, where you can actually be headed south on one highway and north on another at the same time.

Hard to believe—and even harder to describe when you try to give directions—but true. Don’t try this if you’re not from around here.