Pragmatic Capitalism

Practical Views on Money & Finance

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Your Mutual Funds (Still) Suck

S&P released the 2014 SPIVA analysis over the weekend and the results were not so pretty. They found that mutual funds and “active” funds regularly underperform their benchmarks: “Based on data as of Dec. 31, 2014, 86.44% of large-cap fund managers underperformed the benchmark over a one-year period. This figure is equally unfavorable when viewed… Read More

The Best Thing You’ll Read Today – Before I go

Here’s a powerful essay in Stanford Medicine by Paul Kalanithi. Kalanithi was a neurosurgeon who died three days ago from metastic lung cancer. But he left a beautiful series of notes on his experience. I know this site is about money, finance and economics, but the reality is that most of the people who read this… Read More

All Securities Issued Are Always Held By Someone

I am seeing the demonization of holding cash all over the place this week. But here’s the reality of cash’s existence – someone, somewhere holds a cash position at the end of the day. Saying that cash is “bad” is a fallacy of composition. This is why I found Adam Nash’s attack on Schwab to… Read More

What is “Cash” in a Brokerage Account?

The recent attacks on Charles Schwab from Betterment and WealthFront seem to prove a disturbing reality – many advisors simply don’t know what “cash” in a portfolio really is and its necessarily positive aspects.