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Pragmatic Capitalism

Practical Views on Money, Finance & Life

‘Essential Reading’

Understanding the Art of Doing Nothing

Most of what we end up doing in our lives is determined not by what we decide to do, but by what we decide NOT to do. In the course of any given day we decide not to do millions of things. Eliminating all of these actions results in a direction that determines how we… Read More

Why I Prefer to Think of Stocks as Bonds

Bonds have always struck me as fairly simple instruments. In general, you know what a (high quality) bond’s return will be and you know what its time horizon is. That makes investing in fixed income instruments much simpler than investing in stocks. After all, the most difficult part about the stock market is that you… Read More

Investing is not the Same as Gambling

It’s the Monday following the second leg of the Triple Crown and a whole bunch of people lost money betting on the Preakness. Like the stock market, the allure of gambling is strong because many people think that having more money will solve most of their problems. And while there are some similarities between investing… Read More

How to Avoid the Problem of Short-Termism

If I had to pinpoint the biggest problem for most asset allocators I would probably say short-termism.  Short-termism is the tendency to judge financial markets in periods that are so short that it results in higher fees, higher taxes and lower average performance.  We’ve become accustomed to judging the financial markets in quarterly or annual periods… Read More

What Financial News Sources Should You Read?

The Wall Street Journal recently noted that they will be closing the backdoor search loophole to their content thereby forcing readers to subscribe.  For those who aren’t aware of this trick – you can access most pay-for financial news sites by searching for the headline on Google.  Clicking on that link takes you to the… Read More

Why Countercyclical Indexing Makes Sense

I am totally convinced that low fee indexing is the best way to allocate one’s savings (in fact, my entire company is based around this view).  But when it comes to allocating that savings in a specific manner there are virtually limitless options. We know that reducing your frictions is the only way to guarantee higher… Read More