Over the past couple of years, international diversification has come under fire as (gasp!) international stocks have substantially underperformed U.S. stocks, which of course is EXPECTED to happen every now and again. Over the period December 31, 2010 to May 21, 2012, the S&P 500 Index was up 7.8 percent, while the MSCI EAFE Index (basically the international equivalent of the S&P 500) was down 12.9 percent. This difference has been driven by depreciation of foreign currencies relative to the dollar and generally bad performance of international stocks compared to U.S. stocks, with both of these components of underperformance largely driven by the never-ending Eurozone debt crisis. But what about the longer term view of international diversification? Here, the case is settled: International diversification has ... Continue reading →

Carl RichardsCarl Richards is a certified financial planner in Park City, Utah, and is the director of investor education at BAM Advisor Services. His book, “The Behavior Gap,” was published earlier this year. His sketches are archived here on the Bucks blog. Money can’t buy happiness.You hear this all the time, but is it true? I know we can point to rich people who appear miserable and poor people who appear happy. Of course there is that study from Princeton University that I wrote about in 2010:…Daniel Kahneman, a winner of the Nobel in economic science, and co-author Angus Deaton found that people reported an increase in happiness as their incomes rose to $75,000 a year. Then, the impact of rising income on happiness levels ... Continue reading →

As you’ve probably noticed by now, I try to mix up the content on the blog. When I need a good laugh, one of my favorite past times is checking out financial news site and magazine headlines. By the law of large numbers, some of the headlines will be really funny. I’ll be doing this segment from time to time on the blog and generally mixing it up between fake and real headlines. In this inaugural offering of FBRH, though, all the headlines are fictional. Congress Establishes “Bubble Detection Board,” Names John Maynard Keynes and Benjamin Graham Executive Directors Upon Realizing Keynes and Graham Are Dead, Congress Commissions Holograms of Each Miss Cleo to Help Congress Channel Keynes and Graham’s Spirits Dow Jones Announces Smart ... Continue reading →