Daily Archives: February 10, 2020

At Some Point Index Funds Will Underperform

Underperformance is a relative term. Compared to what? When times are good, we generally compare relative to market indexes (i.e. S&P 500). When times are bad we like to compare to an absolute return strategy. If the market is down 20% and you are down “only” 18%, I doubt you are throwing around high fives…

Improving the Quality of Our Decisions

We often evaluate the quality of our decisions based on its outcomes. If it was a favorable outcome, then it was a good decision – and vice versa. This form of evaluation may be useful in a lab setting when variables can be controlled, but not in a situation where outcomes are influenced by randomness,…