Back in February, I wrote that the stock market was overvalued and cited metrics like the Shiller PE ratio and Tobin’s Q that show the market is high relative to history. At the time, I concluded by saying that timing the market is notoriously difficult, so pick your stock/bond allocation and stick with it through thick and thin. (Click here for the article) A few people called or emailed back… Read More
We like to say that we eat our own cooking because we invest your money the same way that we manage our own. As one of the chefs in the kitchen, I also eat a lot of things that I’m not ready to serve. For better for worse, my account operates like a test kitchen. Some of the experiments turn out unexpectedly well and it is served out to everyone… Read More
When I first saw the headline on CNBC that Bill Gross was leaving PIMCO, I didn’t pay close attention because I assumed it was one of those headlines that didn’t have any facts but asks a provocative question, like ‘Is Bill Gross Leaving PIMCO?’ It’s almost an absurd question, but that’s exactly what happened on Friday after a series of bad public stumbles, some of which I’ve chronicled already (click… Read More
Since taking over Daily Insights last July 1, the market has gone up steadily at an annualized pace of 19.69 percent through the close of business yesterday. In addition to the substantial gains, volatility for the S&P 500 has been uncharacteristically low. Naturally, I’m appreciative that we’ve all been able to enjoy a straight-up market, but I’m also realistic and know that it won’t always be like this. It’s normal… Read More
In our retirement planning model, the Acropolis Financial Forecaster, there are essentially five key variables that affect the probability of meeting your goals. They are as follows: Saving Before Retirement When to Retire Spending in Retirement Market Returns & Inflation Rate Portfolio Risk The first three factors are entirely under your control and the second one is the most critical because the timing of your retirement stops contributions to your… Read More
You may have noticed already, but I constantly refer to academics and academia. As a firm, we put a lot of value on the ideas that come from the ivory towers and have academic support for nearly every strategy and sub-strategy that we employ. We appreciate the thoughtfulness, research, peer-review process that has contributed so much to the way we think about markets. But, sometimes, academics can get a little… Read More
Alibaba Group Holding (ticker: BABA) went public on Friday at a price of $68 per share, which valued the company at $168 billion, making it one of the 40 largest companies in the world, according to S&P Capital IQ. Once the stock started trading in the open market, however, investors bid the stock higher and it ended the day at almost $94 per share, valuing the company at $231.4 billion…. Read More
Although the first exchange-traded-fund (ETF) hit the market in 1993, they really didn’t catch on until about 10 years ago. The first product ever is still one of the most popular, the Spider S&P 500 ETF Trust, which trades under the ticker SPY. When we launched Acropolis in 2002 there were 113 ETFs on the market with a total of $102 billion in assets under management according to data from… Read More
Twice per year, Standard & Poor’s issues a report that compares the performance of actively managed mutual funds to corresponding S&P indexes. The most recent report, the S&P Indexes Versus Active, or SPIVA, can be found here. It’s a great report because it provided high quality, continuous evidence in the ongoing debate about active versus passive management. The debate, which has being going on for 30+ years, centers on who… Read More
If you pay quarterly taxes, they’re due today! The next payment isn’t until January 15th of next year, but it probably makes sense to start salting away money now so that you’ll have plenty on hand in a few months. If you aren’t sure whether or not you need to pay quarterly taxes, you probably don’t. The quarterly taxes are actually estimated tax payments on income that is not subject… Read More
