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Frequently “Oaked” Questions: The Tariff Drop

April 8, 2025You Asked, So We’ll Answer FOQ: This tariff drop – is it different this time? Short: Nope Long: The market drops for many different reasons. But most importantly, it ALWAYS drops: Nothing new here. The takeaway is that after every single big drop, the market has hit a new high. Every single time. So when you say “It’s different this time”, know that it’s not the reason that matters. It’s the outcome. And the outcome has never been different. We recovered and went on to new highs. FOQ: Why does it hurt? Short: Biology Long: As the ... Read More

How to Process Market Drops

March 11, 2025Behold the effect of time on markets: Allow us to explain. You’re looking at the best and worst returns of stocks (blue), bonds (green) and a mix of 60% stocks to 40% bonds (orange), over four different time frames. One-year returns are straightforward. For the 5-year returns, “rolling” means from 1973 to 1977, from 1974 to 1978, from 1975 to 1979, and so on. Same for ten and twenty years. The returns are annualized. For example, the best 10-year return for bonds was 13.6% per year. The worst was 0.9% per year. Let’s focus on the stock returns in blue, ... Read More

Last Year’s Lessons

February 4, 2025We’ll get right to the point: In investing, forecasts and predictions are worthless. And probably, “in anything”. But for our purposes here, no one in history has been right more often than wrong in such a quantity that would force the rest of us to acknowledge the existence of a true fortune teller. Of course, a look into all past predictions is required to make this assertion. We’ve certainly written enough about it over the years to make the case. And the folly of forecasting is no secret. But a full thesis this is not. Rather, we prefer to pick ... Read More

Beyond Markets

January 26, 2025Investing is just one spoke in the wheel As we kick off the New Year, let’s start by making sure we have a few key pieces of our financial health in order: Budgeting: Whether you’re planning short term for an upcoming vacation or home project, or long term for college or your retirement, knowing your budget is paramount. Now is a great time to revisit last year’s numbers. See what worked and what did not. Most importantly, don’t beat yourself up. Budgeting is like working out: consistency over long periods of time is what produces results. If you fell off ... Read More