Our Bond with Bonds: Even in a Low-Interest-Rate World

By Jonathan Scheid, CFA, AIF®

Investing is a series of trade-offs. Every one of us has a finite amount of money, and we must determine how much we want to put where. Placing a large portion of our money in stocks means we might have tremendous upside potential, but it also means we won’t be able to put a lot of money in the cash and bonds that help stabilize some of the ups and downs of stocks. Placing all our money in cash and bonds might not get us the growth we need to meet our financial life goals. (more…)

A quality investment philosophy: sensible over the long haul and stick with it

In recent years, U.S. stocks have outperformed international stocks and growth stocks have outperformed value stocks. This has led many to question the benefits of diversification and ask what they should do when an investment strategy performs poorly. We should begin with a look at the appropriate lens through which to view investment strategy performance. Then we will address several issues that work to fog our lens and challenge our ability to stay the course. Taken together, we believe an understanding of these topics fosters the mindset necessary to remain disciplined in the face of adversity. (more…)

Connecting the Dots: From Climate Change to Economics and Investing

Climate change is all over the news. But do you know the latest scientific estimates and projections about climate change? How do the projected physical effects of climate change translate into economic costs? What are the costs and benefits of different actions to address climate change? And what are the implications of climate change for asset pricing and investing? (more…)

Investing in Your Quality of Life

The first step to investing in your quality of life is to think about and clarify what is truly most important to you.  This is a time to listen to your own heart and to focus on what you value the very most in life.  Whatever you identify will become the foundation for establishing meaningful life and financial goals.

In addition, as you think about your life in the future, it will be important to view your financial and life plan within a framework of your closest relationships.  If you have a spouse or life partner, you will want to factor in their dreams and expectations as well as your own.  You will also want to take into consideration your responsibilities and your hopes for your children, parents, siblings and those you consider to be “family.” (more…)

Bringing Balance to the Risk Tolerance Continuum

When you are making a financial decision, do you intentionally weigh the potential risks and rewards?  Is weighing that balance more of a rational or emotional process for you?  In other words, do you tend to rely more on facts or on feelings?

For example, when Karla got a promotion at the architectural firm where she is employed, she gave serious consideration to buying a new car.  She thought about the practical and emotional rewards of having a new car such as: 1) having a dependable means of transportation, 2) getting better gas mileage, 3) portraying a successful image to her clients, and 4) experiencing the pride and pleasure that comes with owning a new car (there’s nothing like that new car smell!). (more…)