Adam M. Grossman

WITH YEAR-END IN sight, it’s a good time for some investment housekeeping. What’s worth your attention? Last week, I discussed the importance of asset allocation. According to research, this is the most significant portfolio decision you can make. But while asset allocation is important, it isn’t the only decision. Within each of the major asset classes, there’s another set of considerations.
Bonds. Earlier this year, I conducted a survey on X, as Twitter is now known,

THERE’S AN IRONY IN the world of personal finance: The activity that’s the most entertaining—picking stocks—is also, according to the data, one of the most counterproductive. Meanwhile, making asset allocation decisions is more akin to watching paint dry, and yet—according to the data—that’s one of the most important decisions an investor can make.
Asset allocation refers to the split among your investments—how much you hold in stocks, for example, versus bonds or real estate.

WHAT DRIVES THE PRICE of individual company stocks, and why do some soar while others sink? It comes down to five factors, I believe.
The first two factors are a company’s observable strengths and weaknesses. Consider Apple. Its strengths are easily quantifiable. In the U.S., it’s captured more than half the smartphone market. When you take into account the company’s premium prices, it collects a disproportionate share of the industry’s revenue. Last year, Apple’s profits hit nearly $100 billion,

WHEN THOMAS EDISON was a child, he apparently set fire to a barn on the family’s property. After it burned to the ground, his parents were furious.
“Why would you do such a thing?” his father asked.
Young Edison replied, “I wanted to see what would happen.”
The story may be apocryphal, but I was reminded of it recently when I came across a study titled “Not Learning from Others.” A group of economists wanted to understand more about how people learn.

WITH DECEMBER FAST approaching, it’s a good time to think about end-of-the-year financial planning. What steps might you take?
A popular strategy is to make charitable gifts, both to support good causes and reap a tax benefit. But before you start writing checks, take a moment to better understand your tax picture. Because of the complexity of tax forms, that’s often easier said than done. Still, you don’t need to decipher every number. Instead,

STEIN’S LAW STATES that, “If something cannot go on forever, it will stop.” It’s named for Herbert Stein, an economist who was influential in the 1970s and served as chair of the president’s Council of Economic Advisors.
Stein first made this comment when he saw government debt growing to what he felt was an unsustainable level. While half-joking in the way he put it, Stein was making a serious observation: Trends rarely last forever.

A KEY CONUNDRUM FOR investors: On the one hand, the data on tactical trading are clear. Frequent portfolio shifts are a bad idea and can damage returns. On the other hand, we shouldn’t be so wedded to the status quo that we’re unwilling to ever make a change.
With this conundrum in mind, it was notable when investor and author Howard Marks declared a “sea change” in the investment landscape and recommended that investors revamp their portfolios.

DO YOU EXPECT IT TO be warmer this winter in Minneapolis or in Miami? This isn’t meant to be a trick question. We’d probably all agree that it’ll be warmer in Miami. But what if I asked you to predict the precise temperature in either city on Jan. 1. This is a much more difficult question.
In his book Mastering the Market Cycle, investor Howard Marks uses illustrations like this to make an important point.

AN IRONY OF PERSONAL finance is that retirement can take work. More than once I’ve heard a retiree express this sentiment: “Working was easy. Retirement is complicated.”
There is, I think, a lot of truth to this. When retirement appears on the horizon, numerous questions enter the picture. There are, of course, financial concerns: “How much will I need? Do I have enough? How should I invest my savings?” These questions are important, but they aren’t the only ones.

WHAT’S THE FIRST RULE of personal finance? To answer this question, let’s look at the financial lives of two notable individuals, starting with musician MC Hammer.
When Hammer gained fame in the 1980s, he made millions. But unfortunately, his spending quickly outpaced his income. Hammer bought 19 racehorses, employed a personal staff of 200 and built a $30 million house with a 17-car garage. The result, sadly, was bankruptcy.
If MC Hammer represents one extreme of financial management,

AS THE SAYING GOES, a picture is worth a thousand words. Over the years, I’ve found certain images and illustrations to be immensely helpful in discussing investment concepts. These are the ones I’ve relied on the most:
Only in Australia. A key challenge for investors—if not the key challenge—is that none of us has a crystal ball. It’s impossible to know what markets will do next month or next year.

BACK IN THE 1980s, Michael Milken earned notoriety as “the junk bond king.” With his swagger—and his toupee—Milken was an outsized personality in a normally staid industry. But that was four decades ago. It may have been the last time that bonds were truly interesting.
On most days, bonds are about as dull a topic in finance as you can find. But here’s the challenge for investors: While bonds might be boring, they’re important—and they can be tricky.

I OUTLINED 10 REASONS everybody should have an estate plan in a 2018 article—and what was true then remains true today, especially for those whose assets could be subject to estate taxes.
Under today’s rules, the federal estate tax applies to individuals with assets over $12.9 million. That might sound like a high number. But in 2026, the limit is set to be cut in half. In addition, many states impose their own estate tax,

“YOUR CHECKING ACCOUNT balance is low.” It’s an alert none of us wants to receive, especially if we’ve just been paid. But that was the message that a friend—let’s call him Ron—got recently. A hacker had gained control of his account and started bleeding it dry.
Ron, it turns out, was lucky to have received that alert. Another friend—let’s call him Arthur—received no such alert when his account was also taken over by hackers this summer.

THE CENTRAL Intelligence Agency knows a thing or two about gathering information. That’s why a CIA publication titled The Psychology of Intelligence Analysis is, in my opinion, a valuable resource for investors.
Of particular note is a section titled, “Do You Really Need More Information?” It offers this counterintuitive finding: To make sound judgments, some amount of information is necessary. But beyond a certain point, gathering more data doesn’t always lead to better decisions.