Five years ago, dire predictions were a dime a dozen. It was, after all, a very scary time fraught with uncertainty. Amid all of the dreadful forecasts, one bothered me a lot less than the others: the US dollar would collapse leaving Americans pushing around wheelbarrows of worthless cash in order to buy just one loaf of bread like in Germany’s Weimar Republic. The idea was that the Federal Reserve… Read More
Should We Pay Off Our Mortgage? One of the common questions that we get is whether or not someone should pay off their mortgage before retirement. People always say, “I just want to be debt‑free,” and that’s an admirable goal. It is often an emotional issue as much as a financial issue. Some people don’t sleep well if they are carrying debt; others feel comfortable with mortgage debt and enjoy… Read More
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
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
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
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
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
I was reading the Wall Street Journal over the weekend and saw that the California Public Employees Retirement System (Calpers) was cutting back their hedge fund exposure by 40 percent. Given that hedge funds have generally struggled over the past five years, I was interested to see what the article said, and, basically, it said that they weren’t happy with the lackluster performance and high fees. The article then said… Read More
Cash may seem like the least interesting asset class at this point with interest rates hovering near or at zero for the past several years, but there was a major shift in policy last Thursday. For the most part, investors forget that most cash is actually parked in money market mutual funds. The money market funds invest in short-term government bills from around the world and debt issued by corporations… Read More
Over the years, we’ve seen and created a ‘periodic table’ of returns that stacks asset classes in order of their performance on a year by year basis. By color coding each asset class, most investors look at the table and realized that asset classes jump around a lot and it’s difficult, if not impossible, to make good timing decisions. I thought it would be interesting to the same thing with… Read More
