The investing industry often talks about alpha.
In simple terms, alpha is a measure of outperformance compared to the market.
The evidence shows that fund managers are finding it increasingly difficult to generate alpha.
According to a book called "The Incredible Shrinking Alpha", there are 4 reasons..
Technology and investing have many parallels.
Both constantly improve.
Both evolve over time.
Newer versions constantly replace what was once seen as the best.
And both are passions of mine.
Some have even described one particular type of fund as having a ‘cult-like status’.
Fans of Apple can certainly relate to this.
There are many behavioural biases to overcome when investing.
One of the most common that investors are prone to?
Last week one blog I published caused a flurry of questions to my inbox.
It caused confusion.
And a little anger.
The greatest reaction stemmed from one sentence:
“My own money is in firms such as DFA moving forwards.”
I’m a huge fan of James Clear.
He’s an author focused on habits and decision making.
His ideas come from a wide range of disciplines, including biology, neuroscience, psychology, philosophy.
In other words, evidence.
At the core is a simple, but powerful question.
How can we live better?
You could be forgiven for likening a financial adviser to a personal trainer.
Both improve your health (be it physically, or financially).
Both usually offer a free consultation and develop custom plans for specific needs.
Both aim to make you the best version of yourself.
Most importantly, they both require long-term commitment in order to see results.
When Ronald Read died at age 92 in 2014, his friends and family were surprised to discover he had been hiding a secret.
The retired janitor and gas station attendant, who lived in rural Vermont nearly all his life, had quietly accumulated a fortune of $8 million despite never earning more than a modest income.
You’ve probably heard of the 4 percent retirement rule.
It’s used to determine how much a retiree should withdraw from a retirement account each year.
The idea is the retiree receives a steady income stream, while maintaining a healthy account balance.
It’s considered safe by experts.
But what happens when it’s put to the test against falling markets?