The question about when interest rates will rise has been a big question around here for several years, and we still don’t know. Most investors are worried about rising interest rates and most people, including me, have been very surprised this year to see the yield on the 10-year US Treasury note fall from 3.00 percent to 2.29 percent, as of yesterday. The direction of interest rates matters when you… 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
Every investment strategy requires patience. Let’s say, for example, that you believe, as we do, that small cap stocks tend to outperform large cap stocks over time. You’ve got the empirical data going back to 1926 that clearly shows, with statistical significance, that small stocks outperform large ones. Small stocks are more volatile than large stocks, but that fits elegantly with the theory that to earn a higher return, you… Read More
I like old-timers. They have terrific knowledge, perspective and, above all, experience. I love hearing the war stories about how decisions were made, what succeeded and what failed and the people who were in the room. Over the weekend, I watched a rerun of WealthTrack on YouTube, a PBS show that features a reporter named Consuelo Mack interviewing many of the titans of finance. Most of them are from what… Read More
Any sensible person knows that you have to save money for the future. At the very least, you need to have money set aside for the so-called ‘rainy-day.’ If you don’t have a cushion, the consequence of a negative surprise can be a lot worse than if you have an emergency fund set aside. Do money and happiness go together? Can saving actually make you happier? I wouldn’t have thought… Read More
A recent report by State Street’s Center for Applied Research recently found that individual investors favor cash the world over. In the US, investors keep 36 percent of their investible assets in cash. Globally, that’s a little less than average.
The first investment strategy that I can remember hearing about is the Dogs of the Dow strategy. One of my parent’s friends, who knew I was interested in stocks back in high school, told me one of the ‘secrets’ to beating the market. The strategy is fairly simply: start with the 30 stocks in the Dow Jones Industrial Average (DJIA) and sort them by their dividend yield. Buy the 10… Read More
Just as I enjoy and learn from Warren Buffets annual letter to Berkshire stockholders, I also read and get a lot of value from the annual report from Yale’s endowment. Here’s a link to the current report. Yale’s endowment is the largest in the world and has enjoyed spectacular investment performance, particularly under the stewardship of David Swensen, who wrote one of my favorite investing books of all time, Pioneering… Read More
Markets were lower yesterday across the board, but the feeling in the air, so to speak, was more calm, as evidenced by the four percent drop in the CBOE Volatility index. Granted, it was a four percent drop following a 40 percent increase last week, but the direction was right. Bonds fell, as measured by the 10-year US Treasury bond, as bond investors pulled away from the ‘flight-to-quality’ trade and… Read More
Yesterday’s insight about the Morningstar Manager of the Year generated a lot of interest and feedback from readers. Thank you! I appreciate your replies and make it a point to respond to all of them. While we’re on the subject, I also want to thank you for completing the satisfaction survey that we sent 10 days ago. I am pleased to report that when you were asked whether you would… Read More
