The One Big Beautiful Bill Act is now law. It’s a 940-page document, and I haven’t read it, but my reliable tax sources are highlighting some of the key provisions for individuals that I thought you might find helpful. Before I get into the OBBBA (or OBBB or OBB; they’re still working on the acronym), it’s worth noting that Missouri Governor Mike Kehoe signed a bill that will eliminate individual… Read More
A few months ago, the term ‘stagflation’ was mentioned too casually and frequently, in my opinion. Investors were worried about the impact of a trade war, which is natural, but were too quick to go to “The S Word.” Stagflation is a portmanteau of stagnation and inflation, coined in the 1970s when economic growth was very low (and sometimes negative) and inflation was very high. The term stagnation was often… Read More
It’s not surprising that clients are inquiring about gold, as it has risen 25.3 percent so far this year. When we started this business in August 2002, I thought gold was a terrible investment idea. However, in the 273 months since then, it has handily beaten foreign stocks and bonds, and even eked out a small win over the S&P 500. That’s right, during this time frame, gold gained 10.9… Read More
When the stock market sold -10.7 percent in the three days following Liberation Day, a handful of clients called and asked, ‘Hold the course, right?’ They knew what I would say, and they all held on, and I was relieved. When President Trump paused his tariff plan the following week, the S&P 500 rose 9.5 percent. That wasn’t enough to offset the loss, but it went a long way. One… Read More
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
The headlines have been volatile lately, leading to anxious calls from clients wondering if they should take action based on what they think might happen. If you want to make some changes at the margin, that’s probably okay, but a wholesale change at this moment probably says more about your political views than an unbiased investment outlook. When we set an asset allocation policy with clients, it’s usually in the… Read More
Last week, I said that I would broadly explain hedge funds, but I was distracted by their high costs. I promise to stay on point today. Hedge funds are pooled investment funds that are less regulated than other types of pooled vehicles like mutual funds and ETFs. They are less regulated because their clients are wealthier, which presumes them to be more sophisticated (I’m not sure that’s true, but that’s… 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
