Library Articles
Sleeping With the Enemy
March 14th, 2010
When it comes to investing, our worst enemy may be the one we wake up with every morning. The one we see in the mirror. Ourselves. Our impulses prompt us to run from danger, and chase success, to sell our investments when all seems lost, and buy when the future looks bright. We are also prone to a number of behavioral biases that can distort our decision-making. Left unchecked, our emotions and biases can wreak havoc on our financial well being.
Opportunity Knocks
November 28th, 2009
The Roth IRA was introduced in 1998. While it has proven to be a very popular alternative to traditional IRAs, IRS income limits have prevented many from taking advantage of its unique features. This is all about to change.
Hair of the Dog
July 21st, 2009
The quickest cure for a hangover is more drink - a little hair of the dog that bit you. Of course the quickest way is seldom the best way, and in this case does nothing to get at the root of the problem. It is at best a short-term patch, merely postponing and prolonging the inevitable. In the end, only rest and sufficient time for recuperation will repair the damage and return the body to normal.
Immoral Hazard
April 5th, 2009
Moral hazard refers to the risk that a party, when protected from the consequences of its actions, may behave less responsibly than it otherwise would. The term is most commonly used in the insurance industry, where the existence of insurance tends to raise the incidence of the insured event. For example, there are more house fires than would be the case in the absence of homeowners insurance. Some of the increase is due to a natural, largely subconscious decrease in diligence – people simply do not act with the same level of care when they feel protected – while some is the result of more insidious activity, for example arson.
The Great Unwind
November 25th, 2008
These are challenging times. Daily moves of 4 or 5% in the equity markets have become commonplace. The markets and the economy are daily front page news, keeping us up to date on the latest bank failures and half-baked government rescue efforts. Panic has swept the nation, and now the world, to a degree not seen in a very long time.
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Recent Articles
Sleeping With the Enemy
March 14th, 2010
When it comes to investing, our worst enemy may be the one we wake up with every morning.
Opportunity Knocks
November 28th, 2009
The Roth IRA was introduced in 1998. While it has proven to be a very popular alternative to traditional IRAs, IRS income limits have prevented many from taking advantage of its unique features.
Hair of the Dog
July 21st, 2009
The quickest cure for a hangover is more drink - a little hair of the dog that bit you.