Introducing my new blog

Greetings fellow investors. I’m starting a new blog about investing. I’m a finance professor at the Ivey Business School at Western University, in Canada, where I’ve been teaching finance and investments, and researching about stocks and investing for over thirty years. I have a PhD in finance from the University of Pennsylvania’s Wharton School, and I have a Chartered Financial Analyst designation. I’ve served on foundations, endowments, and pension boards; I have a consulting company; and I’ve provided expert witness testimony about investments, in federal court.

Most recently, I’ve co-authored (with Andrew Lo at MIT) In…

Jack Bogle’s “masterly inactivity” mantra applies to the worlds of warfare, sports, parenting, and markets

Andrew Lo’s interview with Jack Bogle, In Pursuit of the Perfect Portfolio project

I have one regret related to the writing of our book, In Pursuit of the Perfect Portfolio: The Stories, Voices, and Key Insights of the Pioneers Who Shaped the Way We Invest. We conducted interviews with each of the ten featured investment luminaries, but I didn’t have the opportunity to meet the late Jack Bogle — my coauthor, Andrew Lo, had the pleasure of interviewing him. Bogle was the founder of The Vanguard Group, known for its low-cost index funds, a firm that had over $5 trillion in assets under management at the time of his passing in 2019. Perhaps…

In memory of an investment legend

Image from Yale Investments Office

David Swensen, Yale University’s endowment fund long-time chief investment officer, recently passed away after a long battle with cancer. A dedicated man who believed in giving back, two days before his passing, he taught the last class for the term for his Investment Analysis course at Yale University. He grew Yale’s endowment fund from $1 billion when he started in 1985, to over $31 billion in 2020. He embraced a diversification model that became known simple as the Yale Model, but should probably be called the Swensen Model. …

A finance professor explains how Bitcoin has really performed relative to the stock market

Photo by Harrison Kugler on Unsplash

What’s bitcoin really like as a potential investment, and how does it compare with traditional investments in terms of risks and recent returns? Will bitcoin soon be part of a new cryptocurrency asset class that all investors should consider as part of their investment portfolio? We now have over six-and-a-half years of price data since mid-September 2014, when U.S. regulators approved the first derivative product involving bitcoin. So, to answer those questions, I gathered and analyzed price data on bitcoin, the S&P 500, a bond index, gold, the dollar, and the FANG growth stocks — Facebook, Amazon, Netflix, and Google…

The 1987 stock market crash reminds us that asset prices don’t always go up

Photo by Benjamin Wedemeyer on Unsplash

One of my favorite stock market stories involves a domestic commercial flight taken by former Federal Reserve chair, Alan Greenspan. One part of this story could never happen again today, but the other part that could happen offers important investing lessons as the Dow Jones Average recently reached record heights, closing over 34,000 for the first time, and earlier this month bitcoin hit a new high.

Traveling Back 35 Years

Let’s travel back in time to late-1986 to see what was happening in the stock market. The Dow closed that year at a level of 1896 (coincidently, 1896 was the year the Dow index…

Would you have given your money to the recently deceased con artist? Take this 30-second test to find out.

Photo by AJ Alao on Unsplash

With Bernie Madoff’s recent passing while having served 12 years of his 150-year prison term for fraud, I thought it was timely to reflect on what we can learn from his Ponzi scheme, which essentially involved using money from new clients to pay for his lavish lifestyle as well as “returns” to other clients who were exiting the funds; there wasn’t any real investment. The collapse came when too many clients were exiting during the Financial Crisis, and he confessed to his sons, who turned him in to the authorities.

Take This Simple 30-Second Test

But first, here’s a one-question multiple-choice test that every investor…

Grab broke records with a $40 billion SPAC value. Is investing in blank-check companies a good idea?

Here you go, I’ll let you fill out the rest.

Grab Holdings Inc., the “Uber” of Southeast Asia, is the latest and largest announced SPAC deal that values the firm at almost $40 billion, through a merger with a blank-check company in the form of a Special Purpose Acquisition Company. It’s time to pay attention to SPACs to see why all the fuss. I’ll explain what SPACs are, and I’ll describe the pros and cons for investors and other stakeholders, but first I’ll share a cautionary tale from 18th century England, in what may have been the world’s first blank-check company (not literally, but you’ll see what I mean).


The behavior of unrushed versus impulsive investors often mimics those of our pets

Photo by Priscilla Du Preez on Unsplash

When I was a young boy we had a family pet, a Dalmatian named Gypsy, unique because she had only one spot, a patch over one of her eyes. My most vivid memory of Gypsy was the time she spotted six frozen uncooked hot dogs that my mother left on the countertop to thaw. Before anyone could react, Gypsy grabbed the hot dogs and wolfed them all down. Needless to say, Gypsy wasn’t feeling well for a while after that.

Today we share our family home with…

Stephen Foerster

I’m a Finance prof, CFA, and author of In Pursuit of the Perfect Portfolio (with Andrew Lo). I write stories about investing. (I don’t give financial advice.)

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