Every investor eventually holds a losing position. Whether it’s a stock that has dropped 10% or 40%, the experience is remarkably consistent: it feels different from a paper loss on an index fund you’ve held for a decade. Individual positions come with a story—a reason you bought, a price you paid, an expectation you formed.Continue reading “The Psychology of a Losing Position”
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Roughly Efficient Markets
The Efficient Market Hypothesis (EMH) is a foundational concept in finance and is widely taught in academia. At its core, EMH holds that security prices rapidly incorporate all publicly available information, making it extremely difficult for investors to consistently achieve above-average returns. I believe this framework is largely correct but often taken too far. Below,Continue reading “Roughly Efficient Markets”
International Stocks
Should an American investor hold international stocks, or just own the U.S.? It’s one of the more debated questions in portfolio construction, and reasonable, sophisticated people land on opposite sides. Warren Buffett and John Bogle both built their case for staying entirely in U.S. stocks. Meanwhile, nearly every target-date fund and diversified model portfolio —Continue reading “International Stocks”
Total Stock Market vs. S&P 500
Investors seeking broad exposure to the U.S. stock market typically choose between two options: the S&P 500 index or a total market index. Over the long run, the difference between them is unimportant. Yet many investors still find themselves overanalyzing the choice. Both options hold only U.S. companies, so international stocks are a separate decision.Continue reading “Total Stock Market vs. S&P 500”
