Balancing Act

By |2018-01-30T16:50:02+00:00January 29th, 2018|Categories: Global Market Update|Tags: , , |

How often should we rebalance our portfolios? Photo: Alberto 1412. Source: Wikimedia Many people have balanced portfolios. And it’s a good idea to divide our assets between stocks, bonds, real estate, and cash. You never know what’s coming up next. But when one asset grows or shrinks a lot compared with the others, our portfolios can begin to look out of balance. When should we even things up? Rebalancing a portfolio is generally a good move. It [...]

Symmetry Bias

By |2017-09-11T10:19:19+00:00September 11th, 2017|Categories: Global Market Update|Tags: , , |

Have you ever noticed how much we like balance? Da Vinci’s “Vitruvian Man.” Source: Wikipedia We find symmetrical faces more attractive. Animals with asymmetric features – like flatfish with both eyes on one side of their heads – are disconcerting. We like music to have a sense of balance, with a theme, a variation, and a return to the original theme: A-B-A. Classical architecture appears symmetric as well. The Parthenon in Greece and Pantheon in Rome are [...]

Accounting or Sales?

By |2017-05-19T10:15:41+00:00May 12th, 2017|Categories: Global Market Update|Tags: , , , |

Is this glass half full? Or half empty? Photo: Viktor Hanacek. Source: Picjumbo Sales types look out and see infinite possibilities. Accountants see the world as debits and credits, as a process to be managed. Sales-dominated organizations emphasize growth; accounting-centric firms focus on profitability. Put simply, sales brings in the dough, while accounting gets to the bottom line. Both are necessary to any successful enterprise. But there’s often a lot of conflict between the two. Sales people [...]

Classical Investing, Part 4: The Golden Mean

By |2016-11-17T16:25:22+00:00February 27th, 2015|Categories: Global Market Update|Tags: , , , |

Raphael: School of Athens; Image Source: Wikipedia Aristotle’s Ethics has some pretty useful insights. Aristotle talked about the “golden mean.” He linked happiness and virtue to finding the balance between excess and deficiency in any particular trait. For example, the mean between cowardice and recklessness is courage. In politics, the mean between anarchy and tyranny is democracy. In the investment context, Aristotle’s “golden mean” would advocate finding a “golden balance” in your portfolio. Some have argued for [...]

Diversification and Rebalancing

By |2016-11-17T17:23:27+00:00November 30th, 2011|Categories: Money Basics|Tags: , , , , |

Diversification is a general rule for successful investing. The common phrase “Don’t put all your eggs in one basket” describes diversification strategy. This strategy involves distributing your investment holdings among different asset classes in order to manage investment risk and reduce market value loss… […]