The Secret to Yale’s Success
I’ve written about David Swensen and the Yale Endowment several times over the years (here and here, for example) because i find both fascinating. I first learned about Swensen in 2005, when he was heralded ‘Yale’s $8 Billion Man’ upon the 20th anniversary of taking over the endowment. The performance during that period was remarkable: 16.1 percent versus the S&P 500, which earned 11.9 percent during the same time frame. … Read More
Why Hire a Financial Advisor?
Over the years, most of the Daily Insights that I’ve written are about investing, financial planning or, less frequently, economics. I don’t think I’ve ever written about the people hire financial advisors – mostly, because I can’t come up with much of an answer other than a generic statement about ‘peace of mind’ or describe why my most recent client hired me. Now, though, I’ll have a better answer, thanks… Read More
The Most Powerful Man in the World?
Last week, Ryan Craft wrote at terrific article, titled ‘The Most Powerful Man in the World,’ which you can read here about the power of Jerome Powell, the current Chair of the Federal Reserve. It even included a superimposed image of Powell’s face on Superman’s body. I agree with everything that Ryan said, but I couldn’t help but wonder what the leader of the free world might say if he saw that… Read More
The Most Powerful Man in the World
For the stock market, the first quarter of 2019 turned out to be the mirror image of the last quarter of 2018. Since hitting a low on Christmas Eve, there has been no looking back for the S&P 500 as it rebounded over 13% thus far in 2019, nearly erasing the bear market losses from the end of 2018. Clearly, this renewed optimism in the markets is a result of booming economic… Read More
Risk & Volatility
Using the words ‘risk’ and ‘volatility’ interchangeably is one of the bad habits of many financial professionals, myself included. When pressed, we know better, but we make this mistake all of the time nonetheless. Merriam-Webster has four definitions of risk as a noun, two of which are applicable here: ‘the possibility of loss or injury,’ and ‘the chance that an investment (such as a stock or commodity) will lose value.’ Volatility, according to Merriam-Webster,… Read More
Calling Dr. Draghi, Dr. Mario Draghi
Investors have been hyper-focused on every word that comes out of every Federal Reserve official since October, but when the European Central Bank (ECB) made a major policy reversal last week, the markets yawned. Ten years ago, Warren Buffett described the 2008 financial crisis as akin to a heart attack. The Fed, acting as a physician, prescribed zero interest rates and when that wasn’t enough, they tried an experimental strategy known as quantitative… Read More
Stretching Your Dollars, Here and Abroad
Many years ago, I somehow discovered a newsletter called International Living that showed how you could retire overseas and live well without a ton of money. The basic idea was that your Social Security check would go a lot further in Prague than in Philadelphia. The magazine (and now website www.internationalliving.com) always featured beautiful photographs of unspoiled beaches in Costa Rica, wandering streets of old Italian villages and had the feeling of a travel brochure… Read More
When Warren Buffett Speaks, I Listen
Every year, the investors and the financial media eagerly await Warren Buffett’s annual letter to shareholders, and this year was no exception. I didn’t start reading them until four or five years ago, although I once read book that reorganized his letters by topic rather than chronology. Each year, I like to think that I’ll go back and read his letters, which can be found here, on Berkshire’s hilariously antiquated website – but I… Read More
Why Bother with International Stocks?
According to data from Dimensional Fund Advisors (DFA), the value of the US stock market at year-end was worth $28.1 trillion – about 55 percent of the market value for all of the world’s stocks, which totals $51.2 trillion. Developed international stocks are worth $17.4 trillion in aggregate (34.0 percent), and emerging markets stocks are worth $5.7 trillion (11.0 percent). In theory, passive investors should allocate their portfolio accordingly. In… Read More
Lessons From the Shutdown
The big news on Friday was an agreement between The White House and Congressional leaders to reopen the government until mid-February to allow border negotiations to continue. Whatever you feel about President Trump, Speaker Pelosi, the shut-down, ‘The Wall,’ or any other hot-button that’s sure to upset someone, there is a salient, non-partisan lesson that’s worth noting: the importance of either maintaining an emergency fund or sufficient liquidity. Although financial… Read More