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jerryking : jonathan_clements   12

The Education of a Financial Columnist
November 17, 1998 | Wall Street Journal pg. C1 | Jonathan Clements

* Investing is 90% emotional
* Without good savings habits, there is nothing
* You shouldn't invest in a vacuum --non-financial decisions (e.g. about one's health or relationships) can have a financial impact
* There are no gurus
* Churn and get burned
* Diversification is a fair-weather friend
* Risk is in the eye of the beholder
personal_finance  investing  economizing  diversification  Jonathan_Clements  habits  churn  savings  psychology  risk-preferences  risks 
december 2012 by jerryking
Nine Ideas To Help You Live Beneath Your Means And Get Started On The Road To Riches
December 29, 1998| The Wall Street Journal |By Jonathan Clements.

Here’s how:

Maximize your income
Live beneath your means
Religiously save the difference

Bear in mind, this is no small feat. (As Errol Flynn once said, “My problem is reconciling my net income with my gross habits.”) For most folks in our upwardly mobile society, living beneath their means provides a major challenge. But, trust me, a comfortable retirement without sufficient income is a bigger one.
personal_finance  ideas  wealth_management  self-control  self-discipline  economizing  Jonathan_Clements  savings  frugality  retirement  income 
december 2012 by jerryking
Divorcing Well - WSJ.com
February 13, 2008 | WSJ |By Jonathan Clements
My Valentine's Gift to You: How to Divorce the Right Way
personal_finance  relationships  Jonathan_Clements  divorce 
december 2012 by jerryking
Investing Ideas That Stand Test of Time
April 25, 2000 | WSJ | Jonathan Clements

These days I find I am left with just three core investment ideas:
(1) Financial Success is a Sense of Control
If you ask folks about their financial goals, they will likely offer a laundry list of goods they want to buy or announce they want to accumulate as much money as possible. But in reality,
both goals are a prescription for unhappiness.
Sure it might be nice to purchase everything that catches your fancy. But nobody has unlimited wealth, so a focus on endless consumption inevitably results not in happiness, but in frustration and financial stress. Yeah, it would also be great to have heaps of money. But if all you want is an even bigger pile of cash, you will never be satisfied, because you will never reach your goal. So what should you
shoot for? A far more worthy goal, I believe, is eliminating the anxiety that comes with managing money. You want to reach that sweet spot where you feel your finances are under control, no matter what your standard of living and level of wealth.

(2)Investing is Simple
No doubts about it, there are lots of investments and investment strategies that are mighty complicated. But complexity usually means investors are running the risk of rotten results and Wall Street is getting the chance to charge fat fees. Investing is best when it is simple. In fact, if you want to accumulate a healthy nest egg, there
isn’t much to it. First, you have to save a goodly amount, preferably at least ten percent of your pre-tax annual income. Second, you should consider investing at least half of your portfolio in stocks, even if you are approaching retirement. Third, you should diversify broadly, owning a decent mix of large, small and foreign stocks. Fourth, you should hold down investment costs, including
brokerage commissions, annual fund expenses and taxes. Finally, you should give it time. A little humility also helps. Don’t waste effort — and risk havoc — by trying to pick the next hot stock, identify the next superstar fund manager or guess the market’s next move. Instead, your best bet is to buy and hold a few well-run mutual funds.

(3) We are the enemy
If successful investing is so simple, why do so many people mess up? It isn’t the markets that are the problem, it is the investors.
We make all sorts of mistakes. We fret about the performance of each investment that we own, so we don’t enjoy the benefits of diversification. We are often overly self-confident, which
prompts us to trade too much and bet too heavily on a single stock or market sector. We
extrapolate recent results, leading to excessive exuberance when stocks are rising and unjustified
pessimism when markets decline. We lack self-control, so we don’t save enough.

[All the points made immediately above are analogous to Jason Zweig's article on personal finance & investing. From Benjamin Graham --investing is often portrayed as a battle between you and the markets. Instead, “the investor’s chief problem — and even his worst enemy — is likely to be himself.”

Similarly, Nobel Laureate Daniel Kahneman wrote in his book Thinking, Fast and Slow. [that]evaluating yourself honestly is at least as important as evaluating your investments accurately. If you don’t force yourself to learn your limits as an investor, then it doesn’t matter how much you learn about the markets: Your emotions will be your undoing.... ]

If you are going to truly be a successful and happy investor, it isn’t enough simply to devise
strategies that allow you to meet your investment goals. Your strategies also must give you a
sense of financial control and fit with your risk tolerance, so that you stick with them through the
inevitable market turmoil.
That may mean keeping more of your money in bonds and money-market funds. It could mean
paying for an investment advisor. It might mean scaling back your financial goals and accepting
that the kids won’t be heading to Harvard and that you won’t be able to retire early.
These sorts of choices aren’t foolish. What’s foolish is settling on investment strategies without
considering whether you can see them through.
personal_finance  investing  howto  ideas  goal-setting  Nobel_Prizes  money_management  Jonathan_Clements  financial_literacy  biases  humility  mistakes  self-awareness  self-control  proclivities  overconfidence  financial_planning  delusions  self-delusions  emotions  human_frailties  Jason_Zweig  extrapolations  risk-tolerance  recency  unhappiness  human_errors  bear_markets  sense_of_control  superstars  Daniel_Kahneman 
may 2012 by jerryking
Parting Shot: What I Learned From Writing 1,008 Columns - WSJ.com
April 9, 2008 parting words from the WSJ's Jonathan Clements in
which he distills the lessons learned over the years since his "Getting
Going" column began in 1994.
tips  money  money_management  lessons_learned  life_skills  personal_finance  farewells  Jonathan_Clements 
january 2009 by jerryking

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