This month’s edition features articles that focus on the growing dissatisfaction of having foreign investments in your portfolio, how economic slumps in the past have influenced our progress, and the data-driven process of forecasting recessions.
One of the links this month is actually a podcast with an intriguing interview from the CEO of a research institute we’ve followed for years. We’ve found this to be a great way to pass the time on a commute to work this holiday season.
The last inclusion this month is on the lighter side, but the other three are so good (and maybe a little long) we thought you may find the fourth one to be the most fun to read. Look for our next list in the first of January. Hope you enjoy!
Avoiding the Recency Bias in Foreign Stock Markets – We’re all prone to thinking we are best suited by having more of our investments in the areas that have performed the best over the last year. Just take a look at the historical returns on your investment reviews and then recognize which investments you told yourself you should have more in. This article, in unison with our special market commentary last month, stresses the point that we shouldn’t assume the future will play out exactly like the recent past. As the author points out, the most common mistake is “abandoning diversification right before [we] need it most.”
— Ben Carlson (@awealthofcs) November 21, 2014
Masters in Business – Podcast with Lakshman Achuthan from ECRI – Podcasts are excellent alternatives to blogs/articles and another source for FSI to research economic/investing trends. Lakshman Achuthan is the Co-Founder and COO of ECRI (Economic Cycle Research Institute), which is a leading authority on business cycles in the US and abroad. This podcasts discusses the frequency of recessions, indicators of recessions, and current economic trends across the globe. A relatively long podcast, but very informative in nature.
Americans Now Drink More Craft Beer than Budweiser – It can’t be all work and no fun here. Quick article and chart from Slate Magazine of the annual barrels of craft beer vs. Budweiser (not Bud Light) over the last ten years. Craft beer labels account for approx. 14% of the U.S. beer market and growing.
— Jordan Weissmann (@JHWeissmann) November 24, 2014
The Slumps that Shaped Modern Finance – Asset bubbles, government bail outs, and new regulations in response to a financial crisis are nothing new. As Winston Churchill famously said, “Those who fail to learn from history are doomed to repeat it.” Here is an interesting article from The Economist on the evolution of the modern financial system that developed in large part from reactions to financial catastrophe. Originally published back in April but we just read last month.