Insights & Advice

I publish a hyperlocal business newsletter, called the Berkshire Confidence Index, or BCI. In the Spring 2018 BCI survey, which was sent out to nearly 4,000 local business owners, I added the question, “What type of revenue streams do you have?” The answers provided were consumables, sunk-money consumables, subscriptions, sunk-money subscriptions, auto-renewals and contracts. In that order, from suckiest to best, those are the types of revenue models that will help you have sales predictability. The overwhelming response to the question was “not applicable.” Respondents didn’t think it was pertinent to their industry. Moving from selling goods or services as…

Dalton — The stock market decline of last week was mild enough to still leave investors with a lot to be thankful for. The decline prior to Thanksgiving week clipped what ended up being an impressive seven-week winning streak for the Nasdaq, and six weeks for the S&P 500. Following such streaks, is it safer or riskier to remain invested? Are streaks such as these the beginning of longer-term positive trends? Or has the stock market become overbought, and if so, is it time for a price reset? Going back to 1971, there were 34 prior seven-week winning streaks for the…

Dalton — OK, Boomer, it’s time you stopped risking your retirement by loading up on too many stocks and avoiding bonds. That’s the finding of Fidelity Investments’ quarterly retirement report. The investment company performed an analysis across more than 30 million retirement accounts and reported several reveals. Participants who have been in a 401(k) for at least 10 years have a record average balance of $306,500; the Roth IRA account is becoming more popular; and more people are using expensive “target date” funds. Also — and here is where Fidelity goes off the rails — by comparing its own target date recommendations…

Dalton — Many of us think that we’re somehow smarter than the next person. For example, typically 90% of respondents surveyed respond that they are better than the average driver, and that they are also better than average at getting along with people. It’s statistically impossible for 90% of people to be better than average. Overconfidence can be a healthy attribute. It makes us feel good about ourselves, which creates a positive framework. However, overconfidence in our investment skills can get us into trouble. For example, in one study, 74% of mutual fund investors expected their investments to consistently outperform the…