No, Your Portfolio Should Not Have 20% in Gold and 30% in Cash

My latest for Alpha Baskets looks at an Everyone Into The Bunker type of portfolio. These are always interesting to consider because a small defensive component can improve a portfolio’s stats in terms of risk adjusted returns but of course too much defense and you end up with a portfolio of alternatives hedged with a little bit of equity exposures. From the post; The framing of this portfolio is an expectation of some terrible outcome; deflation, hyperinflation, a return to a gold standard or social upheaval. Rickards apparently believes that the end is nigh for the financial system. Please click through to read the rest. Also, this week’s Market Update in which we learned that some front running is now legal?   I went to a car show over the...

When Grown Children Get In The Way of a Successful Financial Plan

My latest for Alpha Baskets looks a type of one off event can that wreak havoc on a financial plan; a grown child who gets hurt or into trouble. As we’ve been talking about for years, there are all kinds of one-off events that occur regularly but that can’t easily be planned including the above but also less dramatic things like a new roof, tires for a vehicle, large vet bill and so on. From the post; So generically speaking parents who are 60 or 70 with a decent nest egg who as a function of an accident or their children’s bad behavior may have to decide whether to come to the financial aid of their child either out of some sort of legal obligation somehow or out of some sort of moral obligation. Please click through to read the rest.   The picture is from a little town in Eastern Wyoming right before the Sturgis Rally in 2012. This might be Sundance, WY but I am not...

Einhorn Has It Wrong

David Einhorn made a little news yesterday with some bubble talk. I was asked for my take on on his comments which are posted at Alpha Baskets. From the post; A little more specific to Einhorn, I read this story in the WSJ and there they attributed a quote to him that a consensus is building that we are in another tech bubble (or words to that effect). That really isn’t the nature of how bubbles work–consensus building. When the next bubble comes, whatever it is, there will be some who do predict it of course but there will be no correct consensus about it. Please click through to read the...

Weekly Market Update

The weekly market update from AdvisorShares is posted at Alpha Baskets. Please click through to check it out.   The picture is an Instagrammed picture of the Grand Canyon of Yellowstone from our trip there in...

Robo Advisors & Behavioral Finance

My latest at Alpha Baskets is titled Robo Advisors & Behavioral Finance and looks at the intersection between biases and quirks we all have and whether the so called robo advisors can help their clients from succumbing to their own fears and greeds. The concept of robo advisors, portfolios built with low cost index funds based on how prospects/clients fill out online questionnaires, is valid but of course not for everyone and will of course have some drawbacks. Interestingly, ETF.com quoted Rick Adelman as saying they burn too much cash because their revenues are so low. Who can say whether Adelman is right or not but it is logical that as a new business model it will evolve/improve. From the post; Behavioral finance is always interesting because our emotions are regularly a bigger impediment to long term investing success than stock and/or fund selection. The article in question was an interview with Terrance Odean from Cal. Odean notes that “we can’t control our initial reactions, but we can learn to control what we do next.” He then goes on to discuss how to modify behavior. Please click through to read the entire...