Financial Planning

Delayed Gratification

 June 8 2017     Matt Woebkenberg
Apologies to our regular readers for missing a few days of posts.  But have no fear...I'm going to make it look like I did that on purpose!  Today we are going to talk about delayed gratification.  Our regular readers who waited out the painful days with no posts exhibited a great tolerance for delayed gratification.  These readers will have better lives than those who couldn't handle the wait and...

Changes to Asset Allocation

 June 6 2017     Matt Woebkenberg
Diversification is great.  Everyone knows that.  Diversification acts as a stabilizer in your investment portfolio.  When some asset classes are suffering, others outperform.  This prevents dramatic declines in the value of your portfolio.  One of the first steps to investing is to set up a diversified strategic asset allocation that you believe will help you achieve your goals over the long run. ...

Business Succession Planning or Lack Thereof

 June 5 2017     Anna Pfaehler
I spent nearly a decade working in a sleepy suburb of New York City. The local diner was a go-to for many a work lunch outing. In standard diner fashion, the menu was huge. It had over 40 salads, we counted once. Often there was decision paralysis when ordering lunch – do I want the one with brie and grapes or should I go for the classic Greek? Luckily, the stakes were low and if you had lun...

Friday Financial Terms: Behavioral Finance

 June 2 2017     Matt Woebkenberg
Much of traditional finance is built on the assumption that people are rational.  For simple academic finance to be correct, all financial market participants must act rationally in their transactions.  This does not happen.  Investors routinely act irrationally, and when that happens, that presents an opportunity for savvy investors to profit.  This extra profit opportunity in excess of the marke...

Know What You Are Buying

 June 1 2017     Matt Woebkenberg
I've got a deal for you.  You give me $290, and in exchange, I will give you $200.  In fact, I will let you take this deal as often as you want.  We can trade over one hundred thousand times a day if you so choose.  Shockingly, I have not yet had any takers on my offer.  But, this is an actual deal that exists in the marketplace.  It is the Bitcoin Investment Trust (Ticker: GBTC).The Bitcoin Inves...


 May 31 2017     Matt Woebkenberg
If you were asked to name famous market "bubbles", you might quickly identify the Tech Bubble of 2000 and the Housing Market Bubble of 2008-2009. Did you know about the tulip bubble that took place during the 17th century in the Netherlands? I bet not.But if you did, good for you. Tulip Mania, or Tulipomania as it has been dubbed by some, is a fascinating case of investor/trader psychology amidst ...

Teenagers Don't Get It

 May 30 2017     Matt Woebkenberg
Recently the Programme for International Student Assessment (PISA) elected to study the financial literacy of 15-year-old students across several countries.  To (presumably) no one's surprise, the results were unimpressive.  According to a Bloomberg article on the study "56 percent of students have a bank account but two out of three don't have the skills to manage it and can't interpret a bank st...

Friday Financial Terms: Efficient Markets

 May 26 2017     Matt Woebkenberg
There is an ongoing and immensely popular (in finance circles) academic debate about the efficiency of markets.  It is an important question because it essentially answers the question about whether or not active investors can outperform the market over time.There are 3 forms of efficiency in markets: weak-form, semi-strong form, and strong form. Weak-form efficiency states that all past stock per...

Financial Advice on an Index Card

 May 25 2017     Matt Woebkenberg
In 2013, a professor at the University of Chicago made the claim that "the correct basic financial advice for most people would fit on an index card."  He proceeded to make that index card and it quickly became popular because of its simplicity and accuracy.  Today's post is simply to direct you to that index card (here).

Millennial Saving Habits

 May 24 2017     Matt Woebkenberg
A recent article from PlanSponsor notes that despite only 8% of people believing that Millennials are doing a good job at saving, Millennials are actually saving 36% more of their annual salary than previous generations.  The perception does not quite match the reality.  The article goes on to say that Millennials are not necessarily saving for retirement however, they are saving for "financial fr...
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