29 Aug 2014

Retire Your Mortgage or Retire With Your Mortgage?

I am frequently asked whether you should pay off your mortgage prior to retiring. The calculus is a little trickier today than it was five or ten years ago because interest rates are so low now. According to 2011 data from the Consumer Financial Protection Bureau, 81 percent of Americans age 65 and older own a home and 30 percent of those homeowners still carry a mortgage. Ten years earlier,… Read More

28 Aug 2014

Diversification or Di-worse-ification?

As I described yesterday, the S&P 500 is on a hot streak this year, up 9.68 percent so far this year through yesterday. I should also note that outside of REITs (which I mentioned a few days ago) and Emerging Markets, the S&P 500 is the hottest thing going this year. Given that REITs and Emerging Markets are relatively small portfolio weights, you might not be feeling the benefit from… Read More

27 Aug 2014

A New Milestone: S&P 500 Closes Above 2,000

For the 30th time this year, the S&P 500 closed at an all-time high.  Yesterday was an even bigger deal because it crossed a big round number: 2,000.  While that shouldn’t mean anything special, it does.    Investors are humans that are subject to all kinds of psychological biases and round number attachment (my name) seems to be one of them.  If you go to Wikipedia, you can get a… Read More

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26 Aug 2014

The Unique Benefits of REITs

As the S&P 500 continues to break new records, another asset class has handily outperformed the stock market so far this year: REITs. REIT is short for Real Estate Investment Trust and refers to securities (corporations or trusts in most cases) that own and operate income-producing commercial real estate. REITs are an attractive way to build a diversified portfolio of commercial real estate since the barrier to entry for a… Read More

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25 Aug 2014

Janet Yellen and the Ice Bucket Challenge

President Harry Truman apparently once quipped, ‘give me a one-handed economist’ because his advisors would start by saying, ‘on the one hand’ and then begin their concluding remarks a few minutes later with, ‘on the other hand…’ In that sense, Janet Yellen’s speech on Friday was two-handed with a little something for everyone, saying both that the labor market is still suffering from the 2008-2009 recession and that interest rates… Read More

22 Aug 2014

The Bull Market That Won’t Die

This is the bull market that just won’t quit. Just a few weeks ago, when stocks dipped it appeared we were finally getting the correction that we’ve all collectively been expecting for years now. It’s unusual to go this long without a 10 percent correction or a 20 percent drop, which is the typical definition of a bear market. The decline that we just went through was less than four… Read More

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21 Aug 2014

Mutual Fund Fees Matter

As I mentioned the other day, I’ve been thinking a lot about what’s changed over the years here at Acropolis. Three years ago, we made our first investment in open-ended mutual funds. We were early adopters of exchange traded funds (ETFs) that operate like mutual funds in some ways but are a little more tax efficient, offer liquidity during the trading day and are often slightly less expensive. Today, we’ve… Read More

20 Aug 2014

Avoiding Risk Can Be Risky

In my opinion, one of the most amazing stories this year is the surprise drop in interest rates. The 10-year US Treasury note started the year at three percent and nearly everyone, including me, expected interest rates to rise this year (but for the short end, which is controlled by the Fed). Today, the 10-year closed at a yield of 2.40 percent and closed as low as 2.34 percent last… Read More

19 Aug 2014

Not All Indexes Are Created Equal

Acropolis will turn 12 in less than 10 days and I can’t help reflect on what has changed over that time and what has stayed the same. Since the beginning, we’ve used index funds, but the way we use them has changed fairly dramatically in some cases. Take small cap stocks, for example. A dozen years ago, we used exchange-traded-funds (ETFs) as the core component of our small cap allocation… Read More

18 Aug 2014

Classic Conflict of Interest

Although it’s been gone for a long time now, I always admired, the St. Louis based brokerage, A.G. Edwards and its CEO while I was growing up, Ben Edwards. I met him one time at a wedding while I was in college and we spoke for five or ten minutes. As you might expect, he gave a quick spiel about how great the company was and how important it was… Read More