When we meet with clients to create or review a financial plan, there’s a section where we try to get a sense of risk tolerance. We’ll show an asset allocation and its long-term expected return, and then, in big red numbers, what this portfolio would have lost in the 2008 financial crisis. We show it in percentage and dollar terms, based on the portfolio size at that time. The idea… Read More
I listen to a lot of investment podcasts, and one of the ones I enjoy the most is Trillions, produced by Bloomberg. It stars two journalists, Joel Weber and Eric Balchunas (pronounced bal-chew-ness, as best I can tell), and a few other rotating cast members. I enjoy listening because the hosts are Generation Xers (like myself), who are funny and down to earth. They feel like friends who talk in… Read More
As noted above, the University of Michigan Consumer Sentiment index received much attention last week. The index is a monthly survey of at least 500 US households, who are asked about their current financial situation, economic expectations, and attitudes toward purchasing major household items. The consensus estimate for February was a reading of 63, which would have been a little lower than the January reading of 64.7. When the actual… Read More
Last September, I wrote that I would write about the four big categories of alternative investments, as defined by the CFA Institute: Hedge funds Commodities and Natural Resources Real Estate and Infrastructure Private Equity and Private Credit Well, five months have passed, and I forgot all about it, but two articles I read recently reminded me. In January, the Wall Street Journal reported on a new study that showed that… Read More
A few weeks ago, someone told me we’re halfway through the 2020s. I was caught off guard, but they were right. They went on to say that this 1920s is looking even better than the last round 100 years ago, so naturally, I went to the data. The chart below shows the growth of $1 invested in large-cap stocks 100 years ago (in green) and this century (in yellow). Somewhat… Read More
Next Monday night, January 27th, Acropolis will hold our 7th Annual Investor Social. Although we are near capacity, there are some spots, so if you can make it, please call to make a reservation. This week and next, I will include some slides that didn’t make it into the final presentation to keep the event moving but were too good to throw away. I’ve often written here that stocks are… Read More
There are many articles about where markets ended in 2024 and where they might go from here. This isn’t one of those articles, but we will send our quarterly newsletter out shortly that does and will host an in-person event, our Investor Social, at the end of this month. One factoid I read was that it was the best two-year return for the stock market since the 1990s, or in… Read More
The late Thanksgiving and my usual Christmas-denial meant that I was surprised to see that this is effectively the last Insight for the year. Yes, I could send one on Christmas Eve and another on New Year’s Eve eve, but returns have been so good this year, that I thought we could all take a break and enjoy the holidays. Before I go, however, I thought I would show what… Read More
In June, I wrote that the S&P 500 had become a growth index by Morningstar’s definition (you can refresh your memory here). I like Morningstar, especially its stock analysis, but it confuses investors by oversimplifying complex topics. While that is a laudable goal (and I try to do the same thing), they go too far. Well, Morningstar saw the problem that the investment community could see and changed their rules!… Read More
Over the last ten years, the oldest technology ETF I could find, the Select Spider Tech fund (ticker symbol XLK), has made more than 20 percent per annum through September 30th. A $10,000 investment in that fund would have been worth $64,172 at the end of last month. Even though I know better than to drive forward while looking out through the rearview mirror, I can’t help it: I want… Read More
