A friend of mine came into some money recently and said that he was wary about actually investing the funds because the market is at an all-time high. He said that he knew he wasn’t supposed to time the market, but wanted to get my thoughts before pulling the trigger. I told him what I tell everyone: as long as your time horizon is sufficiently long, it’s okay to go… Read More
I was emailing a friend who works in the industry on Friday about asset classes that are giving us trouble this year. We both have diversified portfolios for our clients and when you’re truly diversified, something is always giving you a headache. For us, for example, micro cap stocks as measured by the Russell Microcap index are a real aggravation this year, down -1.85 percent this year through Friday compared… Read More
On Wednesday, I met with a client that I’ve worked with for more than 10 years. In fact, we signed the new account paperwork the night before my second daughter was born. As you might expect, my wife was not thrilled. In the late 1980s, this couple made a substantial investment with an extremely well known investor – someone I grew up watching on Wall Street Week with Louis Rukeyser…. Read More
When Mitt Romney ran for President in 2012, he was required to disclose information about his net worth, which was around $250 million. The most interesting element to me, though, was that he had more than $100 million in his IRA. IRAs are an important element of our clients IRAs and some have large balances, but nothing, obviously, like Romney’s. I don’t begrudge Romney and have no interest in getting… Read More
The mantra coming out of the 2008 financial crisis was that banks that are ‘too big to fail’ are simply too big. Our government passed the Dodd-Frank Wall Street Reform and Protection Act and the countries from the G20 got together to create the Financial Stability Board (FSB) in an effort to create a safer banking system. One of the great ironies of the too big to fail problem is… Read More
Not a single major Wall Street economist forecast that the Gross Domestic Product (GDP) in Japan contracted in the third quarter, so yesterday’s economic release that showed an annualized loss of -1.6 percent came as a real surprise. The average forecast, according to the Wall Street Journal was for a positive gain of 2.25 percent. The chart below shows the growth of the US and Japanese economy from an equalized starting… Read More
In 2012, Vanguard announced that they were changing the benchmarks that they track for a large number of their funds. Their domestic stock funds, which had followed indexes created by MSCI, would soon track indexes created by CRSP. Since we don’t use any Vanguard mutual funds or exchange traded funds (ETFs) that track US markets for private clients, that change didn’t impact us. However, we do use Vanguard ETFs for… Read More
Warren Buffett’s Berkshire Hathaway (ticker: BRK.A) announced yesterday that it will buy the battery maker, Duracell, in a deal worth approximately $4.7 billion from Procter & Gamble (ticker: PG). In many ways, the purchase isn’t surprising since Duracell has many of the characteristics that Buffett likes: a strong global brand in an old, boring industry. What’s interesting about this deal, though, is that Buffett isn’t using cash from his $68.3… Read More
Hopefully, The Department and Labor (DOL) and Security and Exchange Commission (SEC) will continue to move towards placing employees first in company 401(k) plans. One step they are considering in raising the legal bar on the advisors to 401(k)s. Acropolis fully supports a stronger fiduciary standard, the lowering of plan fees, and encouraging more effective employee education, as profiled in Financial Advisor Magazine article below. Click here to read the… Read More
One of the most difficult questions that I get is whether or not people should buy long-term care insurance (LTC). My views have changed over time and are likely to continue to evolve and I don’t claim to be an expert in this field. Historically, I thought that the policies were too expensive and often passed on the rule of thumb that I had heard, which has three parts. If… Read More
