Adam M. Grossman

IN THE HISTORY of the investment industry, May 1, 1975, is a date to be celebrated. On that day, the industry took not one, but two, remarkable steps forward.
The first change was an action by the SEC to deregulate stockbrokers. For the first time in more than 100 years, brokers were given the freedom to set their own commission rates on stock trades. The result was a boon for individual investors. Today, instead of paying hundreds of dollars to trade a stock,

JAMES CLEAR, in his bestselling book Atomic Habits, offers this thought-provoking notion: Suppose a plane takes off from Los Angeles on its way to New York. But after taking off, the pilot turns the nose of the plane by an almost imperceptible 89 inches. Where will the plane end up? The answer: nowhere near New York. As it flies across the country, that 89-inch difference will take it hundreds of miles off course.

IN 2005, COMEDIAN Stephen Colbert popularized the word “truthiness.” This term, if you aren’t familiar with it, refers to something which seems like it should be true, but isn’t actually supported by evidence. Are stock market pundits guilty of truthiness? To answer the question, let’s look at a recent event.
First, some background: In the life of an investment analyst, there’s a rare but dreaded phenomenon known as a “profit warning.” This occurs when a company can tell,

ROBERT SOROS, son of billionaire hedge fund manager George Soros, has a surprising explanation for his father’s success: “You know the reason he changes his position on the market or whatever is because his back starts killing him.”
You read that right: The younger Soros attributes his father’s success to a sort of sixth sense—as if he can feel the market in his bones. He goes on: “My father will sit down and give you theories to explain why he does this or that.” But,

I RECENTLY RECEIVED some odd communications from mutual fund giant Vanguard Group.
First, it sent a white paper, “Here today, gone tomorrow: The impact of economic surprises on asset returns.” As the title suggests, this paper examines the relationship between the economy and the stock market. In particular, the authors asked whether accurate economic forecasts could help an active trader profit in the stock market. Their conclusion: To beat a simple buy-and-hold strategy, an investor’s predictions would need to be accurate 75% of the time.

PABLO PICASSO WAS ONE of the most influential, prolific and financially successful artists of the 20th century. Yet, if you had visited his studio at the peak of his career, you might have guessed otherwise: It was a mess and his work schedule was, at best, leisurely.
On a normal day, Picasso would stay in bed all morning and only get to work around 2 p.m. When he did work, according to a biographer,

A LITTLE WHILE BACK, a friend—let’s call him Paul—recommended a book with an unusual title: How Not to Die. As you might guess, it’s about health, nutrition and longevity. Since Paul is a cardiologist and knows a thing or two about what can land people in hospital, I took his recommendation seriously and immediately ordered a copy.
When the book arrived, I learned that the prescription for not dying isn’t so simple.

WITH INCREASING frequency over the past month, I’ve been hearing the question, “Why does the stock market keep going down? I understand why the market dipped when the Fed raised interest rates, but why does it keep going down day after day?”
If you’ve been feeling unnerved by recent headlines, you aren’t alone. After gaining 10% in 2018 through late-September, the U.S. stock market reversed course and gave up that entire 10% over the course of just two months,

IT’S FIVE WEEKS UNTIL the end of the year—which is five weeks during which you can do some valuable financial housekeeping. Here are seven recommendations:
1. Give tax efficiently. In the past, charitable contributions were a direct and easy way to lower your tax bill. But with the recent tax law changes, which include a big hike in the standard deduction and limits on some itemized deductions, this strategy doesn’t work as well.

THE MUSICIAN PRINCE died in 2016 at age 57, leaving behind a legacy of musical genius. Unfortunately, he also left behind an ongoing legal and financial mess. The issue: For reasons no one understands, Prince neglected to prepare even the most basic estate plan, leaving potential heirs squabbling over his fortune.
Under the latest tax law, passed late last year, only those with more than $11.2 million in assets ($22.4 million for a married couple) are subject to federal estate taxes.

RECENT WEEKS HAVE been challenging for our country. We’ve seen horrific terrorist attacks. The midterm elections suggest the U.S. is deeply divided. While the economy has been doing well, the stock market has started to wobble. October, in fact, was the market’s worst month since 2011.
For all these reasons, folks have been asking me whether they should steer clear of the stock market for a while, until the dust settles. That sounds sensible—until you realize the difficult steps involved:
Step 1: Predict what’s going to happen and when.

IS APPLE the greatest company ever? On the surface, it certainly appears that way. The company sells more than 450,000 iPhones every day. Customers love them: According to surveys, iPhone customer satisfaction stands at 98%. Last year, Apple’s revenues topped $250 billion, and in its most recent quarter the company saw profits jump 41% from a year earlier. Not surprisingly, the company’s share price reflects this success. Having gained 33% over the past year,

WHAT’S YOUR FAVORITE tax rate? This isn’t meant to be a trick question. If you’re like most people, your favorite rate is probably zero.
While a 0% tax rate is great, it isn’t easy to achieve. There’s just a handful of ways to create tax-free income. If you have young children, 529 accounts are a great option. If you earn a high income, you might buy tax-exempt municipal bonds.
And, of course, there are Roth IRAs.

IN THE MID-1990s, Federal Express had a problem. Though the company’s safety record was exemplary, regulators had proposed new rules that would have posed an operational nightmare for the giant shipper.
The company flew Boeing 727 air freighters that each accommodated eight containers. Though they had never had a problem, the government’s concern was that if two heavier-than-average containers were loaded next to each other, it could cause the plane to become dangerously unbalanced.

THE STOCK MARKET this year reminds me of one of those Rorschach inkblot tests. The broad U.S. market has gained more than 4%, including dividends, but it’s difficult to know what to make of it. Bulls point to this year’s tax cuts and believe that the market’s gain makes complete sense. Bears, on the other hand, note that the market has quadrupled in less than 10 years and conclude that it’s at an unsustainably high level.