Evidence-Based Investing Archives

Play It Again, Steve – Timeless Financial Tips #1: Repeat After Me: “It’s Already Priced In”

Post published:February 3, 2023

Whenever you try to buy low or sell high, who is the force on the other side of the trading table? It’s the market. The market includes millions of individuals, institutions, banks, and brokerages trading hundreds of billions of dollars every moment of every day. It includes highly paid analysts continuously watching every move the markets make. It includes AI-driven engines seeking to get their trades in nanoseconds ahead of everyone else. And you think you can beat that? We believe it’s far more reasonable to assume, by the time you’ve heard the news, the collective market has too, and has already priced it in.

This Is Your Investment Brain on Pessimism

Post published:October 21, 2022

Have you been reading the headlines, viewing your investment portfolio, and assuming the worst is yet to come? Welcome to your painful crash course on what market risk really looks like—and more importantly, how it feels. Most investors say they’re ok living with periodic market risk, as long as it helps them achieve better returns over the long run. We accept (in theory) that tolerating the interim damage done to our own investment portfolios will help us meet our long-term financial goals. But that’s investment risk in theory. Since it’s been a long time since we’ve encountered an extended bear market climate, you may have forgotten or never known the reality of it. It may not have clicked then, when significant market declines happen, it is usually due to despairingly bad news … amplified by headlines screaming how things are only going to get worse from here. The reality is, when we’re in the middle of a storm of stuff, our behavioural biases make it very difficult to believe we’ll ever see better days.

Investment Fads and Other Destructive Behaviours

Post published:April 14, 2022

Chasing Investment Performance Results in Far More Losers than Winners Would you like to improve your investment game? Counterintuitively, you don’t necessarily need to master more fancy moves; it may be a more powerful play to simply reduce your biggest investment mistakes. It’s those false moves that usually cost you the most gained ground.

Investing During Wartime: How Does the Geopolitical Climate Impact Your Financial Planning?

Post published:March 30, 2022

Most of us are asking important questions about this geopolitical crisis. By no means do our financial concerns detract from the greater, human toll. That said, if I can help you remain resolute as the world justifiably severs Russia’s access to capital markets and the global economy, perhaps we can both do our part to restore justice in Ukraine. So, let’s talk about geopolitics and investing during wartime. Here are my key takeaways:

Understanding Inflation, Interest Rates, and Market Reaction

Post published:March 7, 2022

Most investors understand or perhaps accept the fact that they are not able to time stock markets (sell out before they go down or buy in before they advance). The simple rationale is that stock markets are forward looking by anticipating or “pricing in” future expectations. While the screaming negative headlines may capture attention, stock markets are looking out to what may happen well into the future. It is easy to understand why we might be scared about the recent headline inflation numbers and concerned about rising interest. It is very important to keep this in context, which is what we will address today.

Read more about the article Q&A: What should I do – or NOT do – during the next Bear Market? Maintain long-term investing mindset while waiting patiently for market recovery

Q&A: What should I do – or NOT do – during the next Bear Market? Maintain long-term investing mindset while waiting patiently for market recovery

Post published:February 7, 2022

As we are revisiting and updating this piece in early February 2022, we are starting to see some volatility in bond and stock markets. Not surprising given the strong equity returns over the past 18 months and the fact that most central banks have stated publicly that they will be raising interest rates to tackle inflation. Before we get into any specifics about what one should or shouldn’t’ do during a bear market, I think it is very important to define exactly what sort of investor you are. Remember, our investment advice is aimed at helping you successfully complete your long-term, multi-generational financial journey. So, if you are a long-term, patient, multi-generational investor then read on so you can get some tips on how you can weather any market storm while you persevere and wait for the inevitable recovery. If you are a short-term trader, then you probably won’t find these pointers helpful. So, let's look back at my thoughts from April 2018…

2021 Year-End Insights from An Independent Financial Advisor

Post published:January 11, 2022

Yet another year of your careful financial planning process has been disrupted by the pandemic – or has it?
These uncertain times have impacted our work, life, mental health, and financial security. However, if you have been reading my blog posts this year (and even further back), you will likely know the key to weather market storms: setting goals, making plans, and maintaining a focus on ongoing financial planning, without jumping off course as a result of ever-volatile markets (and world events).
Let’s look back at some of the most popular blogs of 2021 featuring this independent financial advisor’s musings…