STOCK MARKET Investing requires a near superhuman ability to withstand pain. That’s the conclusion of a recent report by investment researcher Michael Mauboussin.
Mauboussin surveyed all stocks trading on U.S. exchanges over a 40-year period, between 1985 and 2024. He found that the median stock experienced a decline of 85% at one point or another. Worse yet, more than half of these stocks never fully recouped their losses. The median stock recovered to just 90% of its prior high-water mark.

I prepared this article  as “homework” for a personal finance elective at a college-preparatory high school I might be contributing to in the Fall. Perhaps it would be helpful to parents whose kids are smitten with the Magnificent 7 or crypto.
After a stock market decline, people may perceive more risk than before, when the decline may have taken some of the risk out of the market.
—Robert Shiller
The investor’s chief problem—and even his worst enemy—is himself.

I have an exasperating and ever-increasing case of double FOMOitis. Today’s stretched stock market valuations have given me a case of fear of missing out (FOMO) for not selling and locking in assured gains – sensible rebalancing theory suggests that we should all be selling on the way up. On the other hand, I have FOMO even considering selling because of the potential opportunity cost of not capturing further gains in a market with clear upward momentum – sensible investing theory (and Jonathan recently) suggests that we should ride the winners while they are hot.

A PLANE’S ALTIMETER measures the airplane’s altitude. It’s a critical instrument—so important, in fact, that planes are typically outfitted with two. That’s for redundancy, in case one fails. In addition, because different altimeters work better in different conditions, the two readings offer pilots multiple points of reference.
I was speaking recently with a retired pilot, who explained this to me and asked how he could apply the notion of redundancy to his finances. It was a good question,

When news on the radio says that a given investment instrument’s price is up or down by some stated percentage or monetary amount, but it doesn’t say what that’s compared to, is there a convention defining this? For example, do they mean a year ago, a day ago, a minute ago, since the last opening or closing, or since some event that is in the news about that instrument, such as a board choosing a new company president?

Today Morningstar released a very interesting article exploring how a 60/40 portfolio diversification limits losses during market declines. Of note is the fact that due to the 2022 bond market swoon this portfolio has still not fully recovered.
You can read the article here:
150 Years of Stock and Bond Market Crashes: How the 60/40 Portfolio Held Up | Morningstar
Here are some highlights:
There have been 19 bear markets for stocks and three bear markets for bonds over the past 150 years—that is,

Sometimes, the big picture that frames your life can just happen without much thought, mostly by luck. I guess not everyone who has good fortune like this will admit anything other than hard work and true grit got them to where they are now. Take myself; I claim some credit for what I’ve achieved, but I had a lot of good tailwinds that certainly helped immensely.
I was part of the last UK generation eligible for free higher education.

Last night after dinner, I went for a cycle. When at our holiday home, it’s one of my favourite routes: it goes along behind sand dunes on a wooden boardwalk until reaching the Giant’s Causeway. From there, it’s a push up onto the cliff-top paths. After a few miles, there’s a steep descent with cliffs on one side and a field with cows on the other. I normally dismount and carefully walk my bike down, but I decided to freewheel while on my bike.

It’s been almost 4 months since I began account transfers to Fidelity.

I began on March 3 with a $500 deposit to open a joint cash management account. I also ordered and soon received a stack of free checks. (For the benefit of Gen Z and some Millenial readers, checks are little pieces of paper that grandparents use instead of cash).
Next came the money market account transfer from an existing firm, which I call our disaster fund. 

STATISTICIAN GEORGE E.P. Box once made this observation: “All models are wrong,” he said, “but some are useful.” This certainly applies to finance, where many of the concepts are imperfect but can nonetheless still be useful. Below are four such examples.
Market valuation. Are stocks overpriced? It’s a question without an easy answer. Even academics who have studied the topic can never be entirely sure. Consider the cyclically adjusted price-earnings (CAPE) ratio.

LAST WEEK, I MENTIONED the 17th century Dutch tulip bubble. There’s a lot we can learn from history. Current events, however, can teach us just as much. Below are three valuable lessons I see in today’s market.
Myopia. Open any finance textbook, and you’ll find that most of its ideas are built on the notion of “present value.” This simply means an investment should be worth the sum of its future cash flows.

I’ve been investing since the early 1980s. I have a business degree and took investing classes. A close friend of my parents wrote the first investing book I read at age 10, called Stock Market ABC by Joanne K. Friedlander and Jean Neal, published in 1969 and given to me on my 10th birthday in April of that year. This started my interest in investing. I also have a background in technology, going back to 1982.

BITCOIN HIT A NEW high last week, topping $112,000. Over the past 12 months, it’s climbed an impressive 55%.
What’s driving this gain, and what should you make of it? I believe there are three key factors. Two are new. One is not.
The first factor was a policy change last year. The federal government approved the launch of new exchange-traded funds (ETFs) that offer easier and more direct access to bitcoin. Following this rule change,

I recently posted on the forum (thank you for the responses) about getting out of the market, but that wasn’t the full story….
We’ve been invested 100% in stocks for a number of years and have reaped the rewards, however, general anxiety and market fluctuations don’t mix. I hated giving up the gains by migrating to a 60/40 (I am a victim to recency bias) and after reading Gary Antonacci’s Dual Momentum, I thought I had found the solution to my quandary.

Every so often, markets go stark, raving mad. Think about the tech-stock bubble of the late 1990s or the real-estate market in 2005 and 2006. But most of the time, markets—which reflect the collective wisdom of all participants—are smarter than any one individual. For proof, look no further than the sorry track record of professional money managers.
That’s why I think it’s worth paying attention to how the stock, bond and currency markets react to news.