Where is the US Consumer? A look beyond the headlines

Recent data related to U.S. Consumers has appeared somewhat inconsistent…

Social Security: Separating Myth from Fact

As a Federal government program – and a large one at that – Social Security is a frequent target for critics. However, while the system does have its flaws, political rhetoric often overshadows a good understanding of the program’s valuable benefits. Below we address some common myths about Social Security.

Myth: Social Security may become insolvent and won’t be there when I need it.

This perception is far from the truth. The reality is that the Social Security trust funds currently hold large surpluses – nearly $3 trillion, in fact.[1] Over time, as more Baby Boomers enter retirement, the system is projected to hit a shortfall. However, those forecasts are built on a narrow accounting basis and don’t reflect the system’s true ability to meet its obligations. That is because, while Social Security relies on its trust funds in theory, the reality is that Social Security benefits are a really just another obligation of the United States government. In other words, regardless of the balances in those trust funds, the government has committed to paying benefits to retirees. So, while it is not impossible, it is hard to imagine a scenario under which the government would renege on its commitments to ordinary Americans, who rely most heavily on the system. In the most likely scenario, the government will just continue to make slow and incremental changes to trim benefits at the margins, as it has done in the past. A wholesale reduction, or elimination, of benefits, however, is extremely unlikely. As a result, today’s workers should have an orderly plan to structure their retirement in a way that includes and optimizes their benefits from Social Security.

Myth: If I want to work part-time in retirement, Social Security will penalize me by reducing my benefits.

This myth is based on a provision in Social Security’s rules known as the “earnings test” that can reduce a retiree’s benefits in certain circumstances. What is important to understand, however, is that the earnings test only applies to workers who choose to collect Social Security prior to their Full Retirement Age (between ages 65 and 67, depending upon the year in which you were born). Once you reach Full Retirement Age, Social Security does not reduce your benefits regardless of how much other income you earn.[2] In addition, and importantly, the earnings test only reduces benefits temporarily. Once you reach your Full Retirement Age, your monthly check will be increased to “reimburse” you over time for the benefits that were withheld earlier. As a result, you will never truly lose any benefits if you choose to continue working while collecting Social Security.

Myth: A dollar today is worth more than a dollar tomorrow, so I should start collecting benefits as soon as I am eligible.

This myth overlooks two critically important facts:

  1. While everyone is eligible to begin collecting benefits at age 62, you can dramatically increase the size of your monthly check if you are able to wait, ideally until age 70. In fact, if you are able to wait, your benefit would increase by more than 7 percent per year, each year, between age 62 and age 70. As a result, the check you receive at age 70 would be more than 70 percent larger than the check you would receive at age 62.[3] Of course, you will, by definition, receive these larger checks for fewer years, but there is a “breakeven” point at a certain age (generally around age 80). After that, your total lifetime benefit will be larger if you wait until age 70 to collect. Unfortunately, the vast majority of Americans (more than 96 percent) choose not to, or are unable to, wait that long,[4] but if you are able to draw on other sources of income during the early years of your retirement, your monthly check will be that much larger. This may require you to draw down on other assets during the early years of your retirement, but this may be a worthwhile tradeoff to secure the guaranteed annual step-ups from Social Security.
  2. Social Security provides a form of life insurance in that it will provide monthly benefit payments to survivors when a Social Security recipient dies. In the most common situation, a widow or widower can choose to collect 100 percent of his or her deceased spouse’s benefit at Full Retirement Age, if it is larger than his or her own benefit.[5] Social Security will also make smaller payments to the minor children of a deceased worker, subject to a family maximum. So, you should not rush to collect Social Security out of fear that you will be “shortchanged” if you die early.

Myth: Social Security checks are too small to make much difference to my retirement.

The following table illustrates the potential value of Social Security retirement benefits for a hypothetical retiree who begins collecting benefits in 2016. While the size of your own (and your spouse’s) benefits will depend upon your particular work histories, what is clear is that the benefits can be very substantial – and they are guaranteed by the U.S. government for life.

Age at Which Worker Elects to Collect Benefits Annual Benefits[6] Cumulative Benefits Through Age 90[7]
Age 62 $25,224 $731,496
Age 70 $42,912 $901,152

Myth: Social Security is just a retirement program.

Social Security is best known for its retirement program, but it is important to know that it can also provide disability and life insurance benefits to workers and/or their families. In fact, last year just 52 percent of new Social Security recipients were retired workers. The remainder included disabled workers (14 percent) and the spouses and children of workers who had died or become disabled (34 percent).[8] The reality is that Social Security is a very comprehensive program, providing benefits in virtually all situations.

Action Steps

As we have seen here, Social Security is a more generous program than it is often perceived to be. However, it is also a vast program with complicated rules – 2,728 “core” rules, to be exact.[9] For that reason, you will want to do careful research in order to fully understand the benefits for which you may be eligible. To get started, here are some recommendations:

  • As a starting point, you should review your most recent benefits statement. If you don’t have one, you can access it online at www.socialsecurity.gov/myaccount. This will provide you with your estimated monthly benefit under a variety of scenarios, though not all.
  • If you have basic questions about your statement, you can call the Social Security Administration, or you can visit one of their more than 1,400 field offices across the country. Keep in mind, however, that Social Security representatives are only permitted to provide information; they are not permitted to provide you with advice or guidance.
  • It is critical to know that most of the choices you make around Social Security are irrevocable. Therefore, before making any decisions, it is vitally important that you review all of your options with a qualified and trusted advisor.


[1] “Fast Facts & Figures About Social Security – 2016,” Social Security Administration, page 4.

[2] “How Work Affects Your Benefits – 2016,” Social Security Administration, Page 3.

[3] Social Security Administration website: https://faq.ssa.gov/link/portal/34011/34019/article/3735/what-is-the-maximum-social-security-retirement-benefit-payable, retrieved September 20, 2016.

[4] Kotlioff, Laurence J. et al., Get What’s Yours, (New York: Simon & Schuster), 2016, page 21.

[5] “Survivors Benefits,” Social Security Administration, page 9.

[6] Social Security Administration website: https://faq.ssa.gov/link/portal/34011/34019/article/3735/what-is-the-maximum-social-security-retirement-benefit-payable, retrieved September 20, 2016.

[7] Author’s calculations. Note that cumulative benefits are presented in constant dollars.  In reality, your benefits would be higher because Social Security benefits increase with inflation.

[8] “Fast Facts & Figures About Social Security – 2016,” page 13.

[9] Get What’s Yours, page 15.

Understanding ETFs

The investment industry is no stranger to fads. In the 1970’s it was the so-called Nifty Fifty. In the 1980’s it was junk bonds. In the 1990’s it was dot-coms, and in the 2000’s it was the big commodity boom. Most recently, the industry has been busy promoting a new type of investment known as an exchange-traded fund, or ETF. In fact, fund companies have introduced more than six hundred of these new funds over the past five years. [1]

There are now ETFs that allow you to invest in every corner of virtually every market, from the U.S. to Chile to China. You can choose to bet on a single industry, a single country or an entire region, if you want. ETFs also let investors bet on unconventional assets such as oil and gas or gold and silver. Should you have a negative view of a particular market, there are ETFs that will allow you to “go short” – that is, to bet on a price decline – or to amplify your bet with borrowed money. There are even ETFs that promise to replicate complicated hedge fund-like strategies.

Against this backdrop, with so much industry attention focused on ETFs, it is worth examining their merits relative to individual stocks to see whether they might be appropriate for your portfolio. To this end, we can compare them across four dimensions: simplicity, balance, taxes and control.

Simplicity: The original promise of ETFs was simplicity; they allowed an investor to create a diversified portfolio with just a single purchase. While it is certainly true that it is easy to purchase any one ETF, the proliferation of ETFs has, ironically, contributed to an increase in complexity for investors. Together with traditional mutual funds, there are now more than 7,000 funds available to investors in the United States. Indeed, the ETF market has become so crowded that there are now more funds than there are stocks listed on U.S. exchanges. [2] As a result, today the task of choosing a portfolio of ETFs can require as much work as choosing a portfolio of individual stocks.

Balance: Research has shown that individual investors are prone to making a set of common, and costly, mistakes when they buy individual stocks. They overpay for “hot” stocks, they trade too much and they fail to diversify sufficiently. [3] ETFs, on the other hand, aggregate a large number of stocks into a single investment, and because of this, they may make it easier to avoid these kinds of mistakes. Unfortunately, ETF portfolios are not perfect either. When a stock’s price is going up, for example, most ETFs will buy more of that stock – exactly the opposite of what you might want to do. [4] For these reasons, you will always want to understand exactly what you own, whether you choose to invest in funds or in individual stocks.

Tax considerations: ETFs are often perceived as being tax-efficient investments. However, investors should be careful not to generalize. An ETF is only tax-efficient if it is explicitly managed with that goal in mind. There is, however, nothing inherently tax efficient about an ETF. In fact, individual stocks can provide you with certain tax advantages that ETFs cannot. That is because, when you own individual stocks, each holding has its own tax status in terms of gains or losses. This gives you tremendous flexibility to manage your taxes when you make sales. Suppose, for example, that you need to pay a tuition bill. If you sell a stock at a profit, you’ll be on the hook for the associated taxes. If, on the other hand, you sell a little bit less of that first stock and also sell some shares of another stock that is down, you can lessen the overall tax impact of your sales. In contrast, ETFs don’t allow you to disaggregate their holdings to control taxes in that way.

Individual securities can also offer tax advantages if you have charitable intent. Instead of donating shares of an ETF, which again just represents the aggregated value of all of its holdings, it is more advantageous to donate individual shares of stock. That is because you can select the holdings that have the largest gains, allowing you to sidestep the largest potential tax bills. From the charity’s perspective, this doesn’t make a difference because they are exempt from taxes anyway. Following the 2015 increase in capital gains taxes and the new healthcare-related investment tax, this has become an even more valuable benefit.

Control: When you own individual stocks, you have complete control over what you own. When you own an ETF, on the other hand, it’s a package deal, for better or for worse; you own shares in everything that the ETF owns. What this means is that you may become an unwitting shareholder in a company that you would not otherwise want to own. A fund tracking the S&P 500 Index, for example, will own shares in all of the big tobacco manufacturers along with other companies that might not necessarily align with your values. Similarly, international funds may be invested across the world – in China, in Russia and in other countries whose values you may not share.


In the final analysis, it is important to recognize that every investment strategy has its own unique set of potential benefits and drawbacks. There is no one “perfect” strategy. As a result, what is most important is to stay focused on your goals and to employ the strategy – or combination of strategies – that best fits those goals.


[1] 2015 Investment Company Fact Book, Investment Company Institute, http://www.icifactbook.org/fb_ch3.html#assets, Retrieved January 31, 2016.

[2] As of May 3, 2016, The Center for Research in Security Price’s U.S. Total Market Index included 3,664 stocks.

[3] Barber, Brad M. and Terrance Odean, “The Behavior of Individual Investors,” September 2011. http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1872211 (Retrieved December 1, 2015).

[4] ETF.com Screener & Database, www.etf.com/etfanalytics/etf-finder, Retrieved August 17, 2016.

The Importance of Timing

In November of 2008, as world markets were crashing and major economies were falling into recession, Queen Elizabeth paid a visit to the London School of Economics. Normally non-confrontational in public, the Queen challenged her audience that day, asking, “Why did no one see this coming?”[1]

While the 2008/2009 recession was unusual in its severity, it was just like every other recession in one respect: as the Queen observed, no one saw it coming. In fact, it wasn’t until September of 2008, when it had already become fairly obvious, that economists began forecasting a recession.[2] While that failure may seem shocking, the reality is that economists have always had a poor track record forecasting recessions. According to a 2001 study conducted by International Monetary Fund economist Prakash Loungani, economists were successful in predicting just two of the sixty recessions that occurred around the world during the 1990’s.[3] Loungani’s conclusion: “The record of failure to predict recessions is virtually unblemished.”

Following the Queen’s 2008 meeting in London, a group of prominent economists attempted to provide a satisfactory answer to her question. In their reply, the economists wrote, “…your majesty, the failure to foresee the timing, extent and severity of the crisis…was principally a failure of the collective imagination of many bright people…”[4] Unfortunately, a failure of collective imagination is not the kind of problem that lends itself to an obvious solution, so it’s not surprising that, according to Loungani, economists’ track record since 2008 hasn’t been much better.[5] As the saying goes, it’s difficult to make predictions, especially about the future.

This inability to predict extends to the stock market as well. Studies going back to the 1960’s have shown that most people lack the ability to successfully “time the market” – that is, to profit by jumping in and out at just the right time.[6] However, there are many other aspects of personal finance in which you can and should consider using timing to your advantage.

Timing can be very important when establishing a trust for the benefit of your family. Because estate tax rules limit the total dollar amount that parents can give to their children (or anyone else) without triggering a tax, the most tax-efficient assets to transfer are those that appear to be trading at depressed prices. Why? Because depressed assets may have the strongest appreciation potential, and any appreciation that occurs after the transfer does not count toward the donor’s cap on gifts. To take a simple example, if a parent gives her child $100 in stock, and it later grows to be worth $150, the gift, from the perspective of the IRS, still only counts as $100. For that reason, it can be worthwhile to use timing to your advantage when making gifts. If possible, you would want to complete your gifts during periods when the value of your financial assets appears depressed. There is no need to employ sophisticated analysis to make this kind of assessment. If the market, or a particular stock, is trading near a 52-week low, or if the valuation in terms of its price/earnings ratio is near the low end of its historical range, then it may be an opportune time to make a gift. If, on the other hand, the market is at an all-time high, you might want to be more cautious, perhaps stretching your gift out over time or choosing an asset from your portfolio that happens to be trading at lower levels.

It also makes sense to consider timing when making charitable contributions. If you have charitable intent, then it is important to think in terms of a multi-year strategy, with the objective of minimizing your total income tax bill over that period while also meeting your charitable objectives. The key questions to ask are:

  • Have you established the total amount that you would like to donate?
  • Do you intend to make gifts out of your future income or do you already have the assets you would like to donate?
  • Do you intend to donate cash or investment assets? Do you have stock in a private company?
  • Is your income predictable or does it vary significantly from year to year?
  • Does it matter when the recipient charities receive the funds?
  • Are there other factors, such as special tax credits, which may impact your tax situation from one year to another?

Because many tax rules are calendar-dependent, the answers to all of these questions will be important as you formulate a plan for making charitable gifts. You should work with your advisors to map out a strategy and timetable that fits your particular situation and then be sure to revisit it each year as things evolve.

The stock market and the overall economy are virtually impossible for economists to forecast because they depend upon unpredictable factors that are outside their control. Your own personal financial situation, on the other hand, has far fewer unknowns. For that reason, it is possible, and may indeed be very rewarding, to make predictions and to time important financial decisions to your advantage.


[1] “How Gamblers Broke the Banks,” Financial Times, December 15, 2008, http://on.ft.com/1PONsSx, Retrieved February 2, 2016.

[2] “Fail Again? Fail Better? On the Inability to Forecast Recessions,” Prakash Loungani, presentation delivered at the Federal Forecasters Conference, September 24, 2015.

[3] “How accurate are private sector forecasts? Cross-country evidence from consensus forecasts of output growth,” Prakash Loungani, IMF Working Paper, April 2000.

[4] “Queen told how economists missed financial crisis,” The Telegraph, July 26, 2009. http://www.telegraph.co.uk/news/uknews/theroyalfamily/5912697/Queen-told-how-economists-missed-financial-crisis.html, Retrieved February 2, 2016.

[5] “Fail Again? Fail Better? On the Inability to Forecast Recessions,” page 8.

[6] See, for example: Jack L. Treynor and Kay K. Mazuy, “Can Mutual Funds Outguess the Market?” Harvard Business Review, July-August 1966, pp. 131-136.

Investing in Private Funds

Financial collapses are no one’s favorite topic, but they are worth reviewing because they often contain valuable lessons for investors. Two events, in particular, are worth reviewing: the 1997 failure of the hedge fund Long-Term Capital Management and the 2008 unraveling of Bernard Madoff’s Ponzi scheme.

In reality, these two organizations couldn’t have been more different – one was a criminal enterprise while the other was a respected fund that simply fell victim to a failed investment strategy. On the surface, however, they appeared similar in many respects: Both were privately owned. Both claimed to have unique and proprietary methods. Both delivered superior investment returns. And, perhaps most importantly, both had an air of exclusivity that enhanced their appeal to prospective investors.

In the end, investors in both funds suffered terrible losses for the same essential reason: they were not critical enough when conducting their up-front due diligence. If you are considering investing in a private fund – whether it is a private equity, venture capital or hedge fund – you should plan to conduct extensive due diligence. While not exhaustive, the following ten-point checklist illustrates the range of questions you should ask as you evaluate any fund:

  1. Why does this investment interest you? The simplicity of this question belies its importance. Indeed, many of Madoff’s investors were drawn in by the so-called “country club effect.” That is, they had heard how a friend was profiting with Madoff and wanted to participate themselves. The fear of missing out can be a powerful, and unhealthy, motivator. To guard against it, you should maintain a strict, dispassionate discipline when considering investments.
  2. How likely is it that this fund will outperform your existing portfolio? David Swensen, manager of the Yale University endowment, cautions: “Investors in hedge funds face dramatically higher levels of prospective failure due to the materially higher level of fees…generating risk-adjusted excess returns [is] nearly an impossible task.”[1] This is not to say that you should never invest in a private fund. Indeed, Swensen invests the majority of Yale’s assets in private funds.[2] What it does mean is that you should think critically about the role that a fund will play in your portfolio. What gives you confidence that the fund will deliver enough value to offset its fees?
  3. Have you thought critically about the fund’s track record? You need to be able to understand how the fund is generating its returns and should not hesitate to ask questions.   If you can’t understand the explanation, you should not invest. Complexity does not necessarily indicate that something is wrong – and indeed many perfectly reputable funds pursue highly complex strategies – but it does mean that you are not in a position to make that determination. If you can’t fully understand a fund’s strategy, you can’t tell the difference between a Madoff, a Long-Term Capital and a perfectly acceptable investment.
  4. Does the fund use leverage, and if so, how much? It is very difficult for any entity to collapse if it has no debt. If a fund does use debt, it can amplify your returns, but it also increases your risk. This is exactly what happened to Long-Term; when markets seized up, they were unable to sell many of their assets, and this prevented them from servicing their significant debt. No one can forecast every conceivable outlier event, but a fund’s debt level will give you some indication about its ability to weather adverse market conditions.
  5. Does the fund have a track record through different economic cycles? The events that caused Long-Term Capital to fail were nearly unprecedented. Nonetheless, a longer track record does give you more information and therefore lowers (but does not eliminate) your risk.
  6. What is the fee structure? Fees and fee structures vary considerably across funds. It is important to understand all of the details.
  7. Are you able to speak with references? Reputable funds will allow you to speak with both current and former clients.
  8. Who are the funds’ vendors? Madoff was able perpetrate his scheme because he did not use an independent custodian and because he used a small-town auditing firm. You should always insist that a fund’s assets be held by a well-known third party, you should insist on a national auditing firm, and you should always verify these relationships independently.
  9. Can you estimate the tax impact? Many funds cater primarily to tax-exempt institutions and therefore operate without regard to taxes. Others recognize the real cost of taxes to individuals and work to avoid tax inefficiencies. You should ask to review sample K-1 forms from every historical year to make this determination. You can also use the K-1’s to calculate the fund’s after-tax returns, allowing you to make an apples-to-apples comparison to your existing portfolio.
  10. What is the fund’s’ liquidity policy? Most funds have policies called “lock-ups” that limit your ability to withdraw funds on demand. In contrast to publicly-traded securities, which can be sold on virtually a moment’s notice, a private fund may restrict your ability to make a withdrawal for some number of months. You should understand a fund’s lock-up policies and think about whether there are circumstances under which those policies might cause you financial distress.


In his classic guidebook for individual investors, Unconventional Success, David Swensen wrote, “successful investors in hedge funds devote an extraordinary amount of resources to identifying, engaging and managing high-quality managers…”[3] His message: it is not impossible to profit by investing in private funds, but it requires significant time and analytical ability, as well as, perhaps most importantly, a dispassionate outlook.

[1] Swensen, David F. Unconventional Success: A fundamental approach to personal investment. New York: Free Press, 2005, pp. 126, 133.

[2] Yale University: http://news.yale.edu/2015/09/24/investment-return-115-brings-yale-endowment-value-256-billion. Retrieved February 4, 2016.

[3] Unconventional Success, page 132.

Investment decisions with no input

Cutting through the noise: a logical approach to an emotional stock market


“The investor’s chief problem – and even his worst enemy – is likely himself.”
 – Benjamin Graham, The Intelligent Investor

When it comes to investing, everyone is an expert – or so it would seem.  Whether it’s on TV, in the newspaper, on the Internet or around the water cooler, everyone has an opinion on “the market.”  The trouble is, many of these ideas are in conflict with one another, and that can make it awfully hard to know what to do with your own investments.  TV pundits tout the growth of China, brokerage firms regularly revise their “buy” and “sell” ratings, magazine covers advertise “137 ways to get rich,”[1] and mutual fund companies talk up the merits of their latest strategies.

Studies of investor behavior demonstrate that this daily bombardment of market news takes a toll, causing us to make worse financial decisions than we otherwise would.  In 1987, for example, the psychologist Paul Andreassen ran a thought-provoking experiment to assess how news reports affected investors’ trading decisions.  What he found was that people who received no news about the companies held in their portfolios did better than those who received frequent news updates.[2]  In other words, no information at all is actually preferable to too much information.  The reason: news makes us act, and often our actions are detrimental to the long-term growth of our investments.

This isn’t just academic.  Multiple studies of individuals’ real world results prove that nonstop exposure to financial news causes us to act impulsively, and that this imposes significant costs.[3]  In a paper titled “Trading Is Hazardous to Your Wealth,” University of California researchers Brad Barber and Terrance Odean demonstrated that individual investors consistently underperform broad market indices.[4]  Why is this the case?  In large part, it is because many investors trade too frequently in an ongoing, but ultimately fruitless, pursuit of the next hot idea.  In fact, in their study, Barber and Odean found a direct relationship between investors’ trading activity and their returns.  The most active traders realized the worst performance, and the least active did the best.

How can you do better with your own investments?  Below are three suggestions to help you navigate your own course in a way that sidesteps these pitfalls:

First, recognize that investment decisions are specific to every individual, so your starting point needs to be a personalized investment plan that is designed around your own specific goals.  When you have this in place, it will serve as your touchstone and a reminder that you shouldn’t feel the need to rethink your strategy every time the market moves or a TV pundit makes a recommendation.  No one on TV or in a magazine can tell you what is best for you.

Second, recognize that there is no one “right” answer or “best” strategy when it comes to investing.  Sometimes growth stocks will be rallying, and at other times it will be value, or small-cap or International.  In some periods Internet stocks will appear unstoppable, and in other periods energy stocks will be all over the headlines.  Research has shown, however, that individual investors are very poor at predicting the market’s future movements, [5] so the best approach for most people is to create a broadly diversified portfolio and to be disciplined in maintaining that diversification over time.

Finally, when crises come – as they inevitably do – you want to stay calm.  Intuition suggests, and the data prove, that investors are most likely to make costly mistakes when the market is in turmoil. [6]  As long as you understand what you own, and the role that each investment plays as part of your overall plan, it should be easier to sit tight through periods of market turmoil.  Even though we often feel compelled to do something when we see the value of our investments decline, often the better decision is to avoid making any rash decisions.  As the psychologist Andreassen pointed out, “when a news story breaks, investors should ask themselves whether anything, other than the price, has really changed.”  If the market is, in fact, just being irrational, and nothing has fundamentally changed, then just take a deep breath and remember that there is no such thing as a loss until you actually sell something.

Warren Buffett once said, “Wall Street makes its money from activity; you make your money from inactivity.”[7]  The evidence suggests that he is right.  When your investment strategy is designed around your own personal needs and goals, you’ll have a far easier time sticking with it regardless of what the market is doing or what the headlines are saying.  Not only will this help you sleep at night, but this research indicates that your portfolio will be better off as well.

[1] Forbes, June 29, 2015.

[2] Andreassen, Paul B., “On the Social Psychology of the Stock Market: Aggregate Attributional Effects and the Regressiveness of Prediction,” Journal of Personality and Social Psychology, Vol. 53, No. 3 (1987), pp. 490-496.

[3] Barber, Brad M. and Terrance Odean, “All That Glitters: The Effect of Attention and News on the Buying Behavior of Individual Investors,” Review of Financial Studies, Vol. 21, No. 2 (April 2008), pp. 785-818.

[4] Barber, Brad M. and Terrance Odean, “Trading Is Hazardous to Your Wealth: The Common Stock Investment Performance of Individual Investors,” The Journal of Finance, Vol. 55, No. 2 (April 2000), pp. 773-806.

[5] Barber, Brad M. and Terrance Odean, “The Behavior of Individual Investors,” September 2011.  http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1872211 (Retrieved December 1, 2015).

[6] DALBAR Inc., “Quantitative Analysis of Investor Behavior, 2015 Edition,” page 7.

[7] Andrews, David, Editor, The Oracle Speaks: Warren Buffett in His Own Words, Agate Publishing, 2012, page 28.