Unpack Financial Haystacks With The Updated Portfolio Finder


Asset allocation is a obviously passion of mine, and I’m always excited when I find a new metric to tinker with.  These new ideas are not only interesting in their own right, but they also allow me to go back and refine some older tools to make them even better.  And it’s hard to think of a more appropriate place to start than one of my personal favorites — the Portfolio Finder.

Target Practice Is A Good Way To Measure Portfolio Accuracy


I don’t think many people will be surprised to learn that I’m not a fan of using single averages to describe portfolio returns or over-simplified metrics like standard deviation to measure risk.  Both of those numbers obscure so much information that they often lead to disappointing investing decisions and give backtesting a bad name.  I personally have a much more nuanced perspective that embraces the idea of unpredictability in financial planning while keeping things in terms that make sense in the real world, although I’m well aware that uncertainty is a very difficult concept to understand and an even more difficult one to apply.

So sometimes even the simplest questions can trip me up.  For example:


What expected return would you use for the Three-Fund Portfolio for your own financial planning?

Financial Firewalls Defend Against Volatile Markets


With the stock market recently dropping more than 10% in a short amount of time, I’ve noticed a lot of panic in financial circles.  Beyond the fairly steep short-term loss there’s also the fear that a much more painful long-term correction may finally be starting, and stock market investors are understandably on edge.

Do you worry that your life savings are about to catch fire and burn to the ground?  Setting aside what is causing the drop, whether it portends a major correction, or even whether you should be all that concerned about it in the long run, I’d like to focus for a moment on your very real anxiety and what you can absolutely do about it.

I’m personally not worried in the slightest, and it’s not because I’m some sort of investing robot who never gets upset.  It’s because I would not have known that there’s such a major stock correction from looking at my own account balances, as a panic-inducing drop just isn’t there.  While comparing relative portfolio performances over just a few weeks is pretty pointless, in this case it’s definitely not a matter of luck but of very deliberate structural portfolio planning.  When I invested my money, I took the time to build firewalls.  

Three Financial Resolutions That Will Help Every Investor


The new year is here, the Christmas ornaments are packed away, and we can finally get down to the business of making 2018 our best year yet.  This is my own busiest time of the year, as updating every asset, calculator, and portfolio on the site with new annual data is no easy task.  But while I keep calculating behind the scenes, I believe this is a good time to think big picture while things like New Year’s resolutions are top of mind.


What can you personally resolve to do in 2018 to become a happier and more productive investor?


Not sure how to answer that?  Then let me offer a few simple suggestions.

The Top Portfolio Charts Posts Of 2017


It’s amazing how quickly time flies!  2017 was quite the whirlwind, and I can’t help but feel a small sense of awe as I think back to all Portfolio Charts has done over the year.  From new portfolios to new tools and even new countries, I’m really excited about where the site has been and where it continues to grow.

To celebrate the holidays, I thought it would be cool to resurrect the theme from this time last year and highlight the most popular new posts of 2017 sorted by what has consistently drawn the most readers.  So whether you’re new to the site and looking for a good place to start or a long-time reader who doesn’t want to miss anything important, it’s my pleasure to present the best of the best as chosen by other individual investors just like you.

The Charmed Life Of A Thankful Investor


Perhaps the approaching Thanksgiving holiday has made me more sensitive to this type of thing, but in the process of counting my blessings I’ve started to become more cognizant of just how negative investing discussions can quickly become.  Turn on the TV or browse the internet, and it seems there is a never ending stream of stories feeding your sense of financial inferiority.  The better ones tend to focus on how to avoid stress, fear, and greed which is certainly a good message, although running from negative emotions still is not particularly motivational.

The more I think about it, the more I realize there are surprisingly few people out there describing a vision of a healthy investing mindset to aspire to.  That’s a shame, as investing is about so much more than flooring it on a mountain pass while struggling to keep the car on the road.  So let’s take a moment to pull over, check out the scenery, and think about the real purpose of our journey.

After years of learning the hard way, I’ve come to appreciate that successful investing requires not only a smart plan but also a positive outlook.  In my experience, the transition involved a shift in thinking from one of scarcity where more is always better to one of abundance where the concept of “enough” unlocks entire new areas of personal fulfillment.  And the key to that abundance mindset is a simple principle that investors too often take for granted — Thankfulness.

Are you a thankful investor?

The Ulcer Index Is A Helpful Way To Quantify Portfolio Pain


As we all recover from a happy Halloween full of way too much candy and possibly a bit too much to drink, I imagine that many of you may not feel so great.  Indulgence has its downsides, and once the excitement of the sugar high wears off sometimes all you’re left with is an upset stomach.  Whether that discomfort is really bad but you recover quickly or is relatively minor but persists for a long time doesn’t really matter, as both situations are equally undesirable.

There’s a similar problem with investing, and scores of articles have been written on risk tolerance, sleeping well at night, and all sorts of downside mitigation strategies to help reduce that pain in your stomach that you just can’t shake when markets aren’t going your way and your life savings are struggling to stay afloat.  I’ve written before about how smart asset allocation can help solve the problem, and I’ve just added a really cool metric to take that analysis one step further.  It’s appropriately called the Ulcer Index, and understanding how it works can help you find just the right portfolio for your personal pain tolerance.

Browse Each Portfolio In A Whole New Light


I’ve always had a particular love for stained glass.  Not only are the colors incredibly vibrant, but the medium is also truly dynamic and the lighting can transform the same window throughout the day.  One moment it’s dark and rich, and the next it’s bright and lively.  With light activating glass and glass transforming light, stained glass is a special symbiosis of art and nature that allows you to look at the same objects totally differently.

In the investment world, the portfolios are the glass and the data is the light.  Too often people study portfolios through a single fixed spotlight of US-centric data, but that does the observant investor quite the disservice.  Certain investing biases become unfairly engraved as immutable truths based simply on the favorable lighting, while alternative ideas that may actually be much more attractive outside of the gallery setting get lost in the shuffle.  But study the same portfolios through the lens of an investor who does not live in the United States, and things get a lot more interesting.  The glass lights up in a different way, and new features rise to the top.

REITs Are Now Available For All Countries


I’m always thinking about ways to make the site helpful for more people, and lately I’ve been working on ways to improve the tools for investors outside of the US.  Building a site like this is kinda like building a house over time — it’s an ongoing project requiring incremental steps, and sometimes you have to eliminate a key barrier to make room for the next addition.

One roadblock to expanding the portfolio analysis to other countries has been how to handle REITs, as eight portfolios on the site utilize them while the available data applies only to the US market.  Well, after a bit of research I’ve determined that the data is actually a lot more useful than I previously realized, and I’ve decided to unlock REITs as an option for other countries in the calculators.  Here’s how it works.