It’s been another long, fun year with a lot written. There were hits. And misses. But overall it was a good year…I think.
This blog has always been about learning. Really, it follows my path of learning and trying to share what I learn as simply as possible. Writing helps me understand…well…how much I actually understand this stuff.
Sometimes I get it right. Sometimes it’s plain as day that I don’t have a clue. And sometimes I write purely for fun just to mix things up, or as an excuse to try out a new toy because I like to see how things work.
So, while I privately dwell on the misses (not really), here are ten of the more fun and popular posts from this year.
1. The $10 a Day Lottery Habit That Pays Off – This was by far the most popular post written this year and it was a total fluke. I only wrote it because I wanted to try a new toy – an interactive charting tool I came across and wanted to see how easy it was to use. I guess, when you combine the lottery, saving money, and toss in a Simpsons quote for good measure, you get a hit. Who knew. By the way, the chart was really easy to use.
2. The Benefit of International Diversification – For some reason, I felt the need to compare U.S. and International stock performance. Maybe the topic of home bias was making the rounds earlier in the year. I can’t remember. This post should help explain why part of your portfolio should be outside your home country.
3. Investor Returns When the Market Seems to Go Nowhere – This was my attempt at explaining why an index is not the same as investor returns. Or why price returns are not total returns. An index, like the S&P 500, seems to go nowhere during bear markets – essentially peaking, falling, and climbing back to even. Anyone who stays invested through a bear market will always beat the index thanks to total returns.
4. How a Fed Rate Hike Affects Stocks – The Fed rate hike was supposed to be the biggest financial event this year. Everyone expected it. Braced for it. And we’re still waiting. This post shows how stocks performed during past rate hikes and why nobody knows what will happen this time.
5. 60/40 Portfolio Performance During Economic Cycles – Ever wonder how a diversified portfolio (versus an all stock or all bond portfolio) performs during economic recessions and expansions? This post covers it.
6. What Dollar Cost Averaging Did In The Lost Decade – Or why bear markets make you a lot of money – even when you dollar cost average.
7. Putting the CAPE Ratio Into Context – The CAPE ratio, and how high it is, was a hot topic back in February. The CAPE ratio is a market valuation tool that is somewhat predictive of longer term returns. Some people want to use it as a short-term timing tool, but you probably shouldn’t.
8. Predicting Bond Returns For The Next Decade – A big error people make is to rely too much on historical bond returns. This post should show you why starting bond yields are a better use for expected returns.
9. Investing Comes With Baggage – This post was a fun way of showing how the decisions around investing is a series of gives and takes. Or more simply, there is always risks to be weighed.
10. Seth Klarman on Absolute Returns, Risk, and Timing – I ran across a Seth Klarman video that was filled with helpful info including why you should always think about risk first and why focusing on returns first gets investors in trouble.
I want to thank everyone who read and shared what I wrote this year. All of the posts above, and others, never would have reached nearly as far without it. My goal, as always, is to compound on this year’s successes, learn from my mistakes (hopefully), and take a few big steps forward on this journey next year.