Tag Archives: longevity

Investors Prefer Commissions? Really?

The investors that prefer not to pay an ongoing fee do not perceive the value. And unfortunately, the last 10 years of flat performance for domestic equity markets has reinforced this perception. As we transition to a tactical investment management era, commissions will be harder and harder to justify. Commissions create a barrier that needs to be overcome in order to break even. While asset-based fees also create a barrier, the barrier is much smaller and the tradeoff is flexibility. Furthermore, I believe most services that are purchased upfront (e.g. commissions or hourly) disincentivize a continued healthy relationship. An asset-based fee requires, theoretically, continued satisfaction; whereas, a commission requires the opposite. Continue reading

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Past Performance Does Predict Future Performance

Market predictions can be made for several reasons: industry fundamentals, technical analysis, etc. However, the most influential factor in market predictions is past performance. The psychological mindset of the investor dominates the assessment of the future. This is obviously an unintended and unwanted circumstance. Successful long-term investing requires the elimination, or significant reduction, of this behavioral risk. Predictions are not inherently bad. But it is less about the prediction itself and more about the hypothesis that created it. Continue reading

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On A Long Enough Timeline…

The problem with hedging longevity risk is that it requires a significant time period to play out. Things change during the course of that time. Life expectancies change. Population dynamics change. Knowledge and science changes. To “hedge” for the next 78 years—the current life expectancy in the United States—is not hedging, its speculation. Continue reading

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