Author Archives: Robert Cochran

About Robert Cochran

Robert Cochran is the now retired lead portfolio manager, Chief Compliance Officer, and principal of PDS Planning in Columbus, Ohio and a member of the Board of Directors of Mutual Fund Observer, Inc. Bob’s been a financial professional for the past 31 years, writes thoughtfully and well, and had a stint teaching at Humboldt State in Arcata, a lovely town in northern California. He also serves on the Board for the Columbus Symphony (and was formerly their principal bassoonist) and Neighborhood Services, Inc., one of Ohio’s oldest food banks.

Planning a Rewarding Retirement

By Robert Cochran

This is the first in a series of articles on preparing for retirement. The next few will deal with what retirement looks like – what I will do as I enter another stage of my life, Social Security planning, cash flow expectations, investments, planning for health care, eventual downsizing and/or re-locating, and other topics I am finding important.

In my 36 years of helping clients plan for their retirements, there have been a number of things I now refer to as truisms that ring consistently for most of those clients. These are not retirement planning items, but they will smooth the path toward retirement. Readers of my commentary know most of them by heart, but I am personally more aware of them as I prepare for my own retirement later this year. Here they are in no particular order. Continue reading →

Expect More of the Same in 2017

By Robert Cochran

 2016 was the year of surprises.  Conventional wisdom and expectations were mostly proven wrong.  Think about the following events. It was common knowledge that the Britain vote to leave the European Union would fail.  Common knowledge was wrong.  At the beginning of 2016, all major investment firms suggested loading up on European stocks and reducing domestic exposure.  They were proven wrong.  Many of the same firms recommended investing in large U.S. companies over small companies.  They were wrong. The polls and broadcast media told us the U.S. presidential election options were two: whether Clinton would win by a small amount or by a landslide.  The polls and media were totally wrong, and they are still blaming everything and everyone else but themselves. 

Economists, investment experts, and the media agreed that a Trump victory would mean a Continue reading →

Always Late to the Party, or Understanding Investment Biases

By Robert Cochran

It’s a funny thing, momentum. Some investments can do nothing at all for years, then suddenly produce very strong performance numbers. At the same time, other investments will have years of consistent out-performance and then, seemingly overnight, crash and burn. More often than not, these behaviors happen to individual stocks and sector funds, although some diversified funds fall victim to similar behaviors. Investors themselves often act in ways that lead to their own crashing and burning, causing them to think they are always late to the party, or that the punchbowl was taken away just before they arrived.

Behavioral finance is the study of individual investor Continue reading →

What if…

By Robert Cochran

Investors with any experience at all can recite the long-term results:  the U.S. stock market has averaged about 9-10% total returns over the last 30 years and about 6% the last 15 years.  The bond market has averaged about 5%.  In truth, the average stock market investor has gained only about 3.5%, on average over the last 15 years, and the average bond investor only 3.8%.  The lower investor returns are due to the inability of people to stay in the markets during turbulent time periods, when they cash out near market lows and then miss out on corresponding gains.  All kinds of studies have shown that staying invested pays off, but when risk becomes reality, investors become their own worst enemies, seemingly embracing the “sell low, buy high” concept they are trying to avoid.  Bond investors have realized gains that are almost 25% lower than average, for the very same reasons. Continue reading →