Adam M. Grossman

A FEW WEEKS BACK, a reader—let’s call him Karl—challenged me with a question. Why, he asked, don’t I recommend momentum investment strategies?
If you aren’t familiar with the term, momentum strategies seek to buy stocks that have done well in the past, with the hope that they will continue rising, while also selling stocks that have done poorly, with the expectation that they will keep falling.
Karl asked why, in a recent article, I had dismissed momentum investing as the sort of thing that would turn your portfolio into an “unpredictable stew,” even though research has found that it can be profitable.

JUST BEFORE Thanksgiving in 2017, a heartwarming story hit the news. A young woman from Philadelphia named Katelyn McClure had run out of gas on the highway and found herself stranded. By chance, a homeless veteran named Johnny Bobbitt was nearby and, in an act of selflessness, he gave McClure his last $20 to buy gas.
After making it home safely, McClure wanted to express her gratitude, so she set up a GoFundMe page to help Bobbitt get back on his feet.

IT’S GRADUATION season. Entering the workforce? Here are five steps to help you jumpstart your financial life:
1. Manage your debt. If you’re like many graduates, you have student loans. Depending on how much you owe, you may be wondering how best to allocate your new paycheck. Should you direct every available dollar toward your loans or does it also make sense to begin saving? While everyone’s situation is unique, I have two suggestions.

YOU’VE NO DOUBT heard this before: Asset allocation is the single most important investment decision. If you have the right mix of stocks, bonds, cash and maybe real estate, you sharply increase your chances of success. 
But how do you pick the right mix? There are rules of thumb based on age, there’s a statistical approach called Modern Portfolio Theory, there are risk tolerance questionnaires and there are cash flow-based approaches. Each delivers a different answer—because each emphasizes different factors.

I’VE LATELY BEEN getting a lot of questions about a pair of lookalike investments: U.S. Treasury bonds, which are currently yielding around 1.8% to 2.6%, and online bank savings accounts, which offer similar yields. In other words, you could earn just as much interest in a simple savings account as you could if you tied up your money for a period of months, or even years, in a government bond.
The question I keep hearing: “Why in the world would anyone choose government bonds?

WHEN POLITICAL parties set aside partisan bickering and agree on an issue, it’s worth taking note. Such was the case last week when the House of Representatives voted 417–3 in favor of a bill known as the SECURE Act. This legislation would represent the most significant set of changes to retirement rules in more than a decade.
Why the sudden bipartisan cooperation? For better or worse, both parties recognize that a growing number of Americans face a retirement crisis.

I’LL NEVER FORGET MY first interaction with Wall Street. I was in my early 20s and just getting started in my career, when I was introduced to a stockbroker—let’s call him Eddie. He was a pleasant fellow with a good reputation and all the trappings of success, including a DeLorean in the driveway. He seemed like a safe choice.
My interactions with Eddie were straightforward. He would call from time to time with stock ideas.

ONE SPRING DAY in 1995, McArthur Wheeler walked into two banks near his Pittsburgh home and robbed them at gunpoint.
His plan had one critical flaw: The disguise he chose didn’t hide his face at all. Instead of the usual stocking cap or hat and sunglasses, Wheeler made an unconventional choice. He applied a coating of lemon juice to his face. His reasoning: Lemon juice could be used to make invisible ink, so Wheeler figured it would have the same effect on his face,

WHEN WE ROLLED OVER into May, I was reminded of a saying I used to hear when I worked in the world of stock-picking: “Sell in May and go away.” The idea—based on questionable data—was that stocks lagged during the summer months.
This notion always seemed suspect to me. But even if it were true, I was never quite sure what to do with it. Should an investor sell everything on May 1 and then buy back on Labor Day?

A FEW WEEKS AGO, life changed for 24-year-old Manuel Franco of West Allis, Wisconsin. The winner of a recent Powerball lottery, Franco took home $326 million—and that’s after taxes. With a sum that large, it shouldn’t be hard for Franco to make his winnings last a lifetime.
And yet, more often than not, such windfalls deliver heartache rather than happiness. Consider Lara and Roger Griffiths, an English couple who, in 2005, won the equivalent of $3.2 million from their local lottery.

ON DEC. 7, 2005, a curious thing happened in a Harvard classroom. Prof. Michael D. Smith stood in front of a group of computer science students to introduce a guest speaker: entrepreneur and former Harvard student Mark Zuckerberg. What was curious was that the room was nearly empty. The class met in a huge lecture hall, but there were barely a dozen people in the room.
How could that be? Why was there so little interest in Zuckerberg’s presentation?

I RECENTLY CAME across an academic paper with an attention-grabbing title: “It has been very easy to beat the S&P 500.” Not just easy, but very easy. 
That got my attention because, in recent years, beating the S&P 500 has been anything but easy. In fact, it’s been maddeningly difficult. In eight of the past 10 years, domestic markets have outperformed international markets—by a wide margin. A dollar invested 10 years ago in the S&P 500 would be worth $4.37 today.

AS THE OLD SAYING goes, there are lies, damned lies and statistics. And then there’s investment performance, which may deserve a category all its own.
This topic came to mind recently when I saw a press release heralding the accomplishments of a retired nonprofit executive. Among the claims: that he had doubled the organization’s endowment. This struck me as impressive—until I considered it more critically. What did it mean that he had doubled the endowment?

I RECENTLY HAD the opportunity to attend a panel discussion that included the prominent investment manager Seth Klarman.
Not familiar with Klarman? The simplistic version of his biography has him as a hedge fund billionaire. While that’s true, it doesn’t do him justice. Klarman is more like a cult hero, at least in the investment world. Some call him the “Oracle of Boston.”
Google his name, and you’ll see him described as “the next Warren Buffett.” Search YouTube,

HAVE YOU EVER struggled with a financial decision? If you’re like most people, I suspect that the math wasn’t the hard part. Instead, more often than not, what makes financial decisions a challenge is the subjective element.
Financial decisions involve lots of variables—your future income, interest rates, housing prices, tax rates and more. We can make reasonable forecasts, but ultimately these decisions require us to make judgment calls without complete information, and that can be unnerving.