Despite everything we know about efficient capital markets and all the solid evidence available to guide our rational decisions … we’re still human. We’ve got things going on in our heads that have nothing to do with solid evidence and rational decisions – a brew of chemically generated instincts and emotions that spur us to leap long before we have time to look. 

In the wake of Labor Day, you should consider whether your hard-earned money is doing the most for your future. With pensions almost extinct, how can you make your 401k work harder for a better retirement?

It almost seems like “conventional” wisdom; you should have a portion (typically 5%) of your portfolio in gold. The reasons for owning gold vary, but they tend to be highly emotional as opposed to rational.

In our last piece in this series, “The Weight of Evidence,” we introduced three key stock market factors (equity, value and small-cap) plus a couple more for bonds (term and credit) that have formed a backbone for evidence-based portfolio construction. Continued inquiry has found additional market factors at play, with additional potential premiums.

You’ve probably heard us whistle this tune so often that you can sing along yourself: Among the best ways to maximize expected returns is to minimize the costs involved in achieving them.  This begs the question: What about those fees you pay to folks like us? Do we earn our keep? 

The battle over requiring all financial advisors to act as fiduciaries rages on with both the Department of Labor and the SEC considering fiduciary rules. Probably the biggest reason that nothing has actually happened since the Dodd-Frank mandated considering of a universal fiduciary standard in 2010 is the aggressive resistance of the brokerage and insurance industries.

An accumulation of studies dating back to the 1950s through today has identified three stock market factors that have formed the backbone for evidence-based portfolio construction over the long-run.

If it weren’t for the fact that it represents real wealth, it would be nothing short of fascinating how the market reflects its human participants – in all of our enterprising glory as well as all of our quirky behavioral foibles, including herd mentality.

What is the single most important aspect of a typical human’s life? Basic survival? Pleasure? Enlightenment? Care? I suggest that it is money.

There’s real investing information, and there’s “investing” information. “Investing” information (with quotes) is the stuff that much of Wall Street, Big Insurance, and far too much of the mass money media provides to millions of people who need real investment knowledge, but don’t know where to look.

Grounding your investing strategy in rational methodology helps you best determine and stay on a course toward the financial goals you have in mind, especially when your emotional reactions threaten to take over the wheel. 

Following the Main Money Media will typically leave you more confused than enlightened. Responding to the amped-up assertions of most weekend or late night money show hosts can be downright dangerous. Add the sheer volume of financial information available today and distinguishing valuable investing information from all the bad advice bandied about can be overwhelming.

USA Today stock market reporter Matt Krantz must be desperate for topics. I can’t remember the last time I read a story with as tantalizing a title followed by as much ridiculous “investment” rubbish.