Herman Ye

Newcomers rushed to open a brokerage account last month. Fuelled by the craziness of GameStop, folks jumped into the markets head first. A get-rich-quick scheme paired with a David Vs. Goliath story, this brought investing to the mainstream. Retail investors turned thousands into millions, all while hurting hedge funds in the process. Make money and tackle inequality? How could anyone resist? Driven by emotions and momentum, this was a speculative bubble that was destined to snap back to reality ( oh there goes gravity ). A lot of people are now losing money and are screaming foul at the rich for rigging the game.  A terrible first impression. Why invest when they can change the just rules? This is the wrong lesson. Does the stock market favour the rich? Yes. They have faster computers and better information. But if you put down your broad brush you'll see the stock market is a great way for everyone to build wealth. Pros might have advantages but they don't have complete contr...

Core and explore. A popular approach to investing that allows for a sensible portfolio with a hint of recklessness. The strategy is simple. Keep most of your holdings in a risk-appropriate portfolio and reserve a small portion (up to 10%) to go nuts. Whether that be mushroom stocks, Bitcoin or GameStop. Your cheat meal to an otherwise healthy diet.  Trading is tempting. The thought of finding hidden gems or leveraging up your returns is exhilarating. It's the skydiving to indexing's drying paint. Having some "play money" is a good way to scratch this itch without putting your entire financial well-being at stake. The downside is the cost of entry. It's entirely possible you'll hit a few home runs. However, odds are you'll come up short over time. These losses compound and become a huge drag on your lifetime returns.  Trading is addicting and time consuming. You'll be constantly checking your account and stressing over your next moves. It's a toll o...

Special Purpose Acquisition Companies. A mouthful, luckily we can just call them SPACs. SPACs skyrocketed in popularity in 2020, raising over $50 billion dollars. More in a single year than in all the preceding decade. 

There's nothing like finding a good deal. You feel like an absolute winner tracking one down. Purchases feel more special as they're paired with a sense of accomplishment. Food tastes better. Clothes look sharper.  The opposite is also true. A bad deal feels foolish and taints all that's associated. No one wants to get ripped off. As investors, this aversion can make us hesitant to invest during a bull market.  Today's market feels frothy. The market is constantly rising and bubble talks dominate the airwaves. To invest right before a market crash would be devastating. The ultimate rip-off.   "I'll wait for things to settle down" is a common sentiment. The problem is, no knows when that will be. Meaningful pull backs are few and far between. Unlike retail, deals don't happen on a schedule. Waiting on the sidelines means risking significant growth. All time highs are typically followed by more all time highs. Missing the best market days can be costly. ...

When we think wealthy people, we think millionaires. When we think big companies, we think billion dollar market caps. With powerhouse countries, we think trillions in GDP. Millions, billions and trillions. In our heads, we think of these numbers as neighbours. With a billion just a step away from a million, and a trillion an arms reach from a billion. In reality, these numbers are worlds apart.  When numbers get this big, it's hard for our brains to fathom. Let's use a couple examples to get a better sense of scale.  Example 1: Time Is Money If you saved $100 a day:  You become a millionaire in under 30 years. Pretty reasonable. Takes work but achievable over a lifetime. To be a billionaire, you need to save for 27 thousand years. A huge jump. We go from achievable to needing to be a vampire. A trillion is 27 million years. The length modern humans have been around...times 135. Example 2: Stacking Paper Stack a million $1 bills, it would be 358 feet tall. Abou...

As the year comes to a close, the S&P 500 finishes up 16%. A solid return all things considered. 2020 was a decade in a year - we had market euphoria, panic, then euphoria again. March was the standout month of a standout year. It was peak panic and the market showed it by crashing 30%. The drawdown was agony but as with all pain, there's a lesson to be gain. Most millennials have only known a bull market. Never experiencing anything close to a crash. March was the perfect stress test of what we thought our risk tolerance was.  For me, March stung. No one likes to lose money. But I was largely unbothered. I had no plans to abandon ship. I didn't lose sleep. I was fine. Part of me was actually happy buying cheap. My demeanour was confirmation that I was in the right portfolio - for me.  On the other hand, if you sold, it's a sign your portfolio might be too risky for your tolerance.  Conventional risk assessments center predominantly on timeline. The later you ne...

We finance nerds spend a lot of time thinking about investments. Constantly watching the markets and checking our brokerage account. Overanalyzing this, over-optimizing that. All to squeeze out a few basis points. There's some value here of course but our energy is largely misplaced. Your portfolio should take a backseat to your biggest asset, you.  Human capital - the value of all your future earnings. Your economic power. Far more important than any portfolio decision. You're the cash cow, invest your energy accordingly. The more you invest in yourself, the greater your financial potential. Keep learning. Education is the greatest predictor of wealth. College graduates makes a median $30k more a year than high school graduates. Huge for a single year, life-changing over a career. The chasm grows even wider for those who up-skill post-graduation. Learning makes you valuable.   Focus on your career.  Invest in a career (or build a business) that is financially rewarding ...

Financial Independence, Retire Early (FIRE) is a lifestyle centered around frugal living and aggressive saving. As the name suggests, the goal is to stop working as soon as possible, most aiming by their 30s. The movement has a lot of fanfare with millennials. And as with anything popular with Gen Y, criticism has been prominent.  The math is simple. Figure out your annual spend, divide it by your safe withdrawal rate (most use 4%) and you have your FIRE number - a portfolio balance big enough to generate returns that can cover your expenses. Say you spend $20K a year. With a 4% withdrawal rate, you'll need $500K to retire. Easy.  This is usually where the criticism kicks in. The math is fixed, too clean. Returns and expenses are not. The markets are a mystery and life even more so. An extended downturn or a large medical bill can easily throw off your plan.  The second tier of criticism is more personal. Why work a job you hate? Why deprive yourself? Why aim to sit ...

"Too good to be true" is such a cliche - but it's a good one and it's true. Investing is a breeding ground for charlatans. Which makes sense. Wherever there's money, they're there. The scam I see a lot of lately involves training from stock market "geniuses". A classic. Fake experts have always existed, the internet has just made them louder.  The con is simple. A promise of outsize returns through some kind of proprietary system or insights. A guarantee in returns is a guaranteed red flag. Even the best acknowledge investing is hard and returns are finicky. Anyone who is this confident are at best misinformed, at worst a liar. They'll show charts of amazing performance. Usually beating the market by hundreds of points. Shouting you can learn to do it too!.....for just a few hundred bucks. What a value, right?  This is usually nothing more than cherrypicked (or made up) data. Think about it. If they had the key to the markets, why would they giv...

2020 is one for the record books. As the year wraps up, it's still hard to comprehend how weird it's been. For investors, what a journey. We entered the year riding a decade-strong bull, poised to only get stronger. Then COVID entered the chat and along came the big bad bear. The market fell off the cliff and all looked dire. Then in an unprecedented snapback, we hit all time highs a few short months later. I was fortunate enough to have stayed invested and continued investing throughout the year. Buying all the way down and all the way up. All things considered, it's been a solid year of returns. Much better than I expected. I should be very happy. But I'm human, and FOMO is real. Stories of investors making a fortune betting on stocks make my returns look like peanuts. The pandemic-induced volatility has stocks doubling and tripling in a matter of weeks. I can't help but to be tempted to join in.  Airlines are still down 50%. These stocks are due to recover and I...