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Seven Ways to Fool Yourself

Last Thursday night Sensible Portfolios held an educational seminar for its clients and friends. Scott Bosworth spoke on the Implications of Investor Behavior. Scott is a VP at Dimensional and his presentation was very timely as investors are concerned about the stock market. I found an old article by Scott's associate, Jim Parker from April 2014...

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Six Reasons Why 401(k) Loans are (Really) Bad

A 401k loan is such a bad investment choice that it should not be allowed in any plan other than for hardships. And yes, it is an investment because when plan participants take a 401k loan, it becomes one of the investments in their account. Consider that: Borrowers often lose the company match Many participants who borrow from their 401k...

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Investment Shock Absorbers

Ever ridden in a car with worn-out shock absorbers? Every bump is jarring, every corner stomach-churning, and every red light an excuse to assume the brace position. Owning an undiversified portfolio can trigger similar reactions. In a motor vehicle, the suspension system keeps the tires in contact with the road and provides a smooth ride for...

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Unhealthy Attachments

Have you ever made yourself suffer through a bad movie because, having paid for the ticket, you felt you had to get your money’s worth? Some people treat investment the same way. Behavioral economists have a name for this tendency of people and organizations to stick with a losing strategy purely on the basis that they have put so much time and...

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Connecting the Dots

“The Australian dollar rose today after Westpac Bank dropped its forecast of further central bank interest rate cuts this year,” read a recent lead story on Bloomberg. Needing to create order from chaos, journalists often stick the word “after” between two events to imply causation. In this case, the implication is the currency rose...

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