In October 2019, I started the CFP^® certification process and finished last month. I wanted to walk through my experience in case it’s useful for others.

CFP^® certification is a four-step process. It involves the “4 E’s”: education, exam, experience, and ethics. The bulk of this post will cover the first two. For more in-depth info, I recommend the CFP Board site.

Education

The education requirement includes a bachelor’s degree and completing the certification coursework. The coursework is seven courses in total: financial planning, insurance planning, income tax, retirement needs, investments, estate planning, and a comprehensive case analysis. With the right credentials, you can bypass the first six and only take the last course. I wasn’t so lucky.

The CFP Board makes it easy to search for colleges that offer the courses. I originally went with an in-person classroom format. The main reason is that I’ve been out of “school mode” for quite a while and thought it would be a better learning environment. I took the introductory course through Northwestern University. Continue Reading…

Peter Lynch’s classic One Up on Wall Street was published in 1989. I bet it left a mark on anyone bit by the investing bug in the 1990s.

The downside of classics like Lynch’s books is how easy it is for new impressionable investors to overlook what’s important when you don’t know what’s important. When I first read it, I’m fairly sure the only lesson I walked away with was “find multi-baggers.” Easy enough. (It wasn’t!)

It’s almost like you have to read the classics three or four times before all the lessons sink in. And maybe add a few years of investing in the markets for good measure too.

I recently dug up my old copy. There was no marginalia (not a good sign) — only some folded page corners. Turns out, I missed a lot but the important lessons were there.

In fact, Lynch ends each of the three sections with this: “If you take away anything from this section…I hope you’ll remember the following.” Then he rattled up off a list.

A selection of his summations are below: Continue Reading…

Market volatility always picks up at random moments every year and somehow investors seem surprised about it. Being less surprised is one of the keys to investment success.

In fact, it’s so important that Ben Graham dedicated a chapter to handling market fluctuations in his classic The Intelligent Investor. His parable of Mr. Market has been retold by others (here, here, and here) over the years for the same reason.

Mr. Market has a crazy streak. He also happens to be your partner in a number of business ventures. Mr. Market shows up day after day quoting a price to buy your shares or sell you his.

And every so often, his craziness peaks and he rattles off some ridiculous prices for those shares. Sometimes those price quotes are much higher than they were the week before. Sometimes they’re much lower. And since Mr. Market is so unpredictable, there’s no telling what prices he’ll offer up next week.

Now, it’s up to you to decide if you want to listen. You can take advantage of the offer or you can do nothing. Continue Reading…

Major market indexes generally do a good job of tracking “the market” but they don’t always tell the whole story.

For example, if you only keep track of the S&P 500, you’re probably oblivious to the increasing number of U.S. listed stocks that have declined 50% or more from their 52-week highs. As the chart below shows, that number currently exceeds 2,000.

The last time we saw numbers anywhere close to that was March 2020 and, prior to that, the 2008 financial crisis (there’s no guarantee it reaches those heights). The point stands that a portion of the market has been hit hard over the past year. Continue Reading…