🔥FusedFire

“The stock market is filled with individuals who know the price of everything, but the value of nothing.” - Philip Arthur Fisher Eugene Fama and Kenneth French have made significant contributions to the field of investing and finance, shaping the way we approach portfolio management and risk assessment. Their groundbreaking research has led to the development of the Fama-French Three-Factor Model, which helps investors understand the factors driving stock returns. In this article, we will delve into the key insights offered by Fama and French and discuss how their findings can be applied to create a robust investment strategy. [Read More]

Hedonic adaptation is a term used to describe the human tendency to quickly adapt to new circumstances and revert to a baseline level of happiness, regardless of changes in wealth or personal circumstances. This psychological phenomenon has significant implications for personal finance, as it can influence both savings and investment decisions. In this article, we’ll delve into the concept of hedonic adaptation and discuss strategies for overcoming its potential pitfalls in order to achieve long-term financial success. [Read More]

Retirement planning can be a daunting task, especially when it comes to figuring out how much money you need to save to retire comfortably. One popular rule of thumb that has been used for decades is the 4% rule. This rule suggests that you can safely withdraw 4% of your retirement savings each year without running out of money. But is this rule still relevant in today’s economic climate? And what about other withdrawal rates, such as the 2. [Read More]

Rebalancing your investment portfolio is a critical part of maintaining a well-diversified and efficient asset allocation. As Warren Buffett once said, “Do not put all your eggs in one basket.” Proper rebalancing can help ensure your investments are aligned with your long-term goals and risk tolerance. In this article, we will discuss the reasons for rebalancing your portfolio, when to rebalance, and how to go about the process. The Importance of Rebalancing Your Portfolio There are several reasons why rebalancing your investment portfolio is essential: [Read More]

Introduction As the great Warren Buffett once said, “Someone’s sitting in the shade today because someone planted a tree a long time ago.” This quote beautifully captures the essence of the Financial Independence & Retire Early (FIRE) movement. Achieving financial independence and early retirement requires a solid plan, including a sustainable withdrawal strategy that ensures you don’t run out of money during your retirement years. In this article, we’ll discuss the importance of a sustainable withdrawal strategy, delve into the famous 4% rule, and explore other withdrawal strategies to help you develop a plan tailored to your specific needs. [Read More]

Bank runs are a phenomenon that has been around for centuries. They occur when a large number of depositors withdraw their money from a bank at the same time, usually due to concerns about the bank’s solvency. Bank runs can be devastating for both the bank and its customers, as they can lead to the bank’s failure and the loss of depositors’ funds. However, there are measures in place to protect depositors, such as the Federal Deposit Insurance Corporation (FDIC) in the United States and the Canada Deposit Insurance Corporation (CDIC) in Canada. [Read More]

Determining how much money is ’enough’ for a comfortable retirement is a crucial question for many families. The answer varies based on factors like lifestyle preferences, geographical location, and the family’s financial goals. This article explores how much money an average family of 4 in the US might need to comfortably retire and enjoy life reasonably well, considering lean FIRE, fat FIRE, and high-cost-of-living (HCOL) or low-cost-of-living (LCOL) areas. Note: [Read More]

Warren Buffett once said, “My wealth has come from a combination of living in America, some lucky genes, and compound interest.” Compound growth is indeed a powerful force that can turn small investments into significant wealth over time. It is the eighth wonder of the world, as Albert Einstein famously said. In this article, we will explore what compound growth is, how it works, and how you can harness its power to achieve your financial goals. [Read More]

One of the most important principles of successful investing is diversification. By spreading your investments across a range of assets, sectors, and geographies, you can help to manage risk and potentially improve your investment returns over time. There is ample research to support the benefits of diversification in long-term investing. One study by Roger Ibbotson and Paul Kaplan found that the benefits of diversification can be significant, with a well-diversified portfolio potentially delivering higher returns and lower risk than a concentrated portfolio. [Read More]

As a long-term investor, I am acutely aware of the impact that taxes can have on investment returns. In fact, Charlie Munger has often said, “Anyone who thinks that taxes don’t matter should talk to a man who has lost half of his wealth to the IRS.” It’s clear that taxes can be a significant drag on investment returns, but there are strategies that investors can use to minimize their tax liabilities while maximizing their returns over the long-term. [Read More]