Print
PDF

Is it Time to Rebalance Your Portfolio?

Every investor wants to buy low and sell high. What if we told you there is a disciplined process for doing just that, and staying on track toward your personal goals while you're at it? There is, and it's called rebalancing.

Here's how it works. Imagine it's your first day as an investor. As you create your new portfolio, you've got a plan to put a portion of your assets in stock, a portion in bonds, and so on. Assigning these weights is called asset allocation.

Then time passes. Because markets don't move in tandem, your investments stray from the original allocations. Even if you've done nothing, market shifts mean you're now taking on higher or lower risks and expected rewards than you intended. Unless your plans have changed, your portfolio needs some attention. This is what rebalancing is for: to shift your assets back to their intended, long-term allocations.

Print
PDF

2018 Financial Best Practices

Written by Brian Puckett, CFP®, CPA/PFS, Attorney at Law.

Apply These Financial Best Practices
To Ring In a Prosperous New Year

Happy New Year! You're off and running into a brand new year, full of hopes and promises to make this one even better than last. Working to energize your wealth management efforts is a great New Year's resolution for anyone. Here are 10 financial best practices to help you jump-start your prosperity in 2018.

1. Save today for a better retirement tomorrow. Are you maxing out pre-tax contributions to your company retirement plan? Taking full advantage of company retirement plans for you and your spouse is an important, tax-advantaged way to save for retirement, especially if your employer matches some of your contributions. If you are 50 or older, you may be able to make additional catch-up contributions to your plan to further accelerate your retirement-ready investing.

Print
PDF

ABCs of Behavioral Biases: The Last Word

We began our series on the ABCs of Behavioral Biases by asserting an important point: Your own behavioral biases are often the greatest threat to your financial well-being.

We hope we've demonstrated the many ways this single statement can play out, and how often our survival-mode brains trick us into making financial calls that foil our own best interests.

Print
PDF

ABCs of Behavioral Biases: O to T

So many financial behavioral biases, so little time! We resume our series with our final batch of biases: overconfidence, pattern recognition, recency, sunk cost fallacy and tracking error regret.

Overconfidence

When we are pursuing a goal – whether it's fame or fortune, or just getting through our daily lives – we all have a very human tendency to overestimate our odds of success.

Overconfidence is generally beneficial, because it's what gives people the nerve to do hard things—such as asking for a raise or running a marathon. But it can be dangerous for investors. Combined with a host of other biases (such as greed, confirmation bias and familiarity bias), overconfidence fools us into thinking we can consistently beat the market by being smarter or luckier than average. In reality, it's best to be brutally realistic about how to patiently participate in the market's expected returns.

Print
PDF

ABCs of Behavioral Biases: H to O

There are so many investment-impacting behavioral biases, we could probably identify at least one for nearly every letter in the alphabet. We continue with the most significant ones by looking at Hindsight, Loss Aversion, Mental Accounting and Outcome Bias.

Hindsight

Hindsight bias is the "I knew it all along" effect – the belief that our memory is correct when it is not. For example, say you expected a candidate to lose, but she ended up winning. When asked afterward how strongly you predicted the actual outcome, you're likely to recall giving it higher odds than you originally did. This is a very common bias.