18 Nov 2014

Japan is in Recession. When is it Not in Recession?

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

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17 Nov 2014

S. Korea Has Outsized Impact on Emerging Indexes

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

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14 Nov 2014

Warren Buffett Continues to Be Clever

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

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13 Nov 2014

Financial Advisor Magazine Highlights Acropolis 401(k)s

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

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13 Nov 2014

Should You Buy Long-Term Care Insurance?

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

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12 Nov 2014

Finding Meaning in the Morningstar Star System

The Morningstar Star system is, by far, the most popular way for individual investors to assess a mutual fund or exchange traded fund (ETF). While the system is fairly straightforward in theory, it can lead to odd, and often confusing results. As always, it pays to understand how the system works to understand what the stars are telling you. The case in point is the Vanguard Total Bond Market funds… Read More

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11 Nov 2014

WSJ: One Story, Two Bad Headlines

When it comes to reading the newspaper online, I was an early adopter. While I miss the physical paper sometimes, I don’t miss the massive recycling effort and I appreciate getting up to the minute news throughout the day. I don’t like some of the tricks that they play online, though. Yesterday, I was looking at the Wall Street Journal (WSJ) online and saw the headline, ‘Small Cap Stocks Especially… Read More

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10 Nov 2014

Mano a Mano with Ben Bernanke

The highlight of last week’s Schwab Impact conference for me was seeing, and then meeting, former Federal Reserve Chairman Ben Bernanke. Initially, Bernanke came to the stage in front of nearly 5,000 attendees and gave a 10-15 minute speech about the Federal Reserve’s response to the 2008 financial crisis. He then did a 45 minute question and answer session with Schwab’s Chief Investment Strategist, Liz Ann Sonders, who did a… Read More

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4 Nov 2014

The Perils of Non-Traded REITs

You may not be surprised to know that there is a steady stream of salesman that come through our doors talking about their mutual funds, exchange-traded-funds (ETFs) and other products that they want us to buy on your behalf. The vast, vast majority of meetings do not sway how we invest your money, but I do like to listen just in case there is something out there that we haven’t… Read More

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31 Oct 2014

GDP Treats Investors

The consensus growth forecast for third quarter GDP was 3.00 percent, so markets responded happily to the 3.55 percent reading from the Bureau of Economic Analysis. The largest contribution to growth came from net exports, which grew at a rate of 1.32 percent and consumer spending added 1.22 percent while inventories were a negative contributor at -0.57 percent. I am always a little confused by how the government reports GDP… Read More

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