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?

I WORKED FOR MORE than 30 years in manufacturing, poring over data and paying attention to every detail that would impact production. As a project manager, I was responsible for making sure hardware was delivered on time, with no cost overruns or quality issues.
If we weren’t meeting deadlines or spending too much money, I was required to report these problems to upper management. They would ask me three questions: “What are you going to do about it?

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,

WHO DOESN’T LIKE free money? I know I do. If you’ve worked for a major U.S. corporation, you have probably also been offered free money. But there’s a potential downside—in the form of a large, undiversified investment bet.
What am I talking about? Let’s start with the matching employer contribution that’s offered in about half of 401(k) plans. You put in a portion of every paycheck and your company then matches all or half of your contribution.

INDEX FUND INVESTING seems to grow more popular by the day—for good reason: For very little in investment costs, you can get a diversified basket of stocks, a return that matches the targeted benchmark and a tiny annual tax bill.
But now that you have yourself such a fine financial vehicle, the responsibility to be a good investor lies in your hands. Or should I say, with your emotions? Even the best investments suffer downturns and spikes in volatility.

LAST MONTH, The Wall Street Journal ran an article with a puzzling headline: “How China Pressured MSCI to Add Its Market to Major Benchmark.” Like a lot of market news, this arcane-sounding story came and went without much notice. But it’s worth pausing to understand what it was all about—and why it matters to you.
First, let’s decode the terminology in the article’s headline: A “benchmark” is another word for an index.

LOOKING TO BUILD an investment portfolio—or rethink the mix you already own? Check out HumbleDollar’s new portfolio-building guide.
The guide takes the most important advice from the site’s chapters on investing, markets and taxes, and turns it into nine simple steps that should help you build a sensible, low-cost portfolio of index funds. I’ve included step No. 1 below. If you like what you read, I encourage you to peruse the other eight steps.

IN SUMMER 2000, the Art Institute of Chicago fell under the spell of a young hedge fund manager named Conrad Seghers. The allure? Seghers claimed that his funds, called Integral, offered “the highest Sharpe ratios in the industry.” The Sharpe ratio is supposed to measure an investment’s risk relative to its returns and is popular in the world of hedge funds. Convinced by this pitch, the Art Institute committed more than $40 million of its endowment to Seghers’s funds.

AFTER THE MARKET turbulence of recent months, the idea of a 100% stock portfolio would strike many folks as crazy. Yet, when I was in the workforce, that’s pretty much what I owned.
I never felt my all-stock portfolio was particularly risky. My wife and I had solid paychecks to rely on. We always maxed out our retirement plans, while also adding to other accounts, and then lived on whatever remained.
While the stock market’s volatility and the occasional downturns may have been disconcerting,

INVESTORS OFTEN THINK of their portfolio as conservative or aggressive. More conservative investors put a larger percentage of their portfolio in bonds, while aggressive investors favor stocks. But there’s a different meaning of the word “conservative”—what I think of as behavioral conservatism.
Conservatism means you lean toward the safe side. You favor things that are familiar, preferring them to the new and uncommon. The dictionary definition of conservatism is this: commitment to traditional values and ideas,

HAVE YOU EVER PLAYED a round of golf? If so, how many holes-in-one do you have? I’ve been playing since age four and have yet to make one. Even the best players in the world know how difficult it is to make a tiny ball go into a 4¼-inch hole that’s 200 yards away.
I got close once. It was a windier than normal day in Iowa, when I hit my first shot on a par three.

IN THE WORLD of personal finance, researchers have long understood that behavioral biases negatively impact investors. Examples include recency bias, hindsight bias, confirmation bias and many others. These are all well documented. Recently, a group of researchers uncovered yet another investor bias: This one is called “alphabeticity bias.”
Alphabeticity, as you might guess, refers to the bias that can occur when choices are presented in alphabetical order. This bias, the researchers note, is found in a number of domains: In elections,

DO THE CHEAPEST index funds always win? A year ago, I tackled that question—and the results for 2017 were mixed. Since then, the question has become even more intriguing. Last year, Fidelity Investments launched four index-mutual funds with zero annual expenses, while also slashing the expenses on its existing index funds.
Those zero-cost funds have only been around for a handful of months, so it’s a little early to gauge their performance. Ditto for the price cuts for other Fidelity index funds;