“Level is dedicated to rewriting the financial rulebook to create a secure future for the next generation.” That’s budgeting app Level Money’s stated mission, which can be found on their website’s “About Us” page. But even as lofty as that objective sounds, co-founder and CEO Jake Fuentes says the company’s sights are set even higher….
A friend of mine recently sold his house. It will be a few years before he’ll buy another one. Because the house was worth a lot more than what he and his wife owed the bank on their mortgage, they are now sitting on a pile of money and wondering what to do with it….
Despite the fact that traditional financial theory has long held that dividend policy should be irrelevant to stock returns, one of the biggest trends to occur in recent years has been a rush to invest in dividend-paying stocks. The heightened interest in these assets has been fueled both by media hype and the current regime…
Calm water makes a lifeboat drill much easier. We aren’t fighting the waves or the fear we feel during an emergency. Still, if the worst happens, and the drill becomes reality, at least we’ve rehearsed. We’ll know exactly what we are supposed do. With the markets relatively calm, now is the perfect time for an…
On May 18, the United States Supreme Court issued its decision in Tibble v. Edison International. On its face, the court’s holding is unremarkable. In a rare 9-0 decision, it ruled that plan sponsors have a continuing duty to review investments in retirement plans and to decide whether or not to keep or sell them….
Most people avoid budgeting because they consider it an exercise in repressive tedium. But it doesn’t have to be. By applying the science of motivation, economic evidence and the art of creativity, the apparent boredom of budgeting and saving can be remade into part a life-giving financial rhythm. In his book, Drive, Daniel Pink teaches…
Few investors understand the stunning odds that are likely dooming their returns. The system is rigged against investors and in favor of those who “manage” their money. Mutual fund families, brokers and insurance companies are the big winners in this process. Investors barely scrape by. Here’s some historical data for your consideration. It may fundamentally…
The “best interest contract exemption” has profound ramifications for retirement plan participants. In its proposed rule requiring that all advisors to retirement plans act as “fiduciaries,” the U.S. Department of Labor includes a “best interest contract exemption.” In my view, this exemption is as significant – if not more so – than the proposed rule…
Few investors understand the stunning odds that are likely dooming their returns. The system is rigged against investors and in favor of those who “manage” their money. Active mutual fund families, brokers and insurance companies are the big winners in this process. Investors barely scrape by. Here’s some historical data for your consideration. It may…
When I say “risk” and you say “risk,” chances are high we don’t mean the same thing. The finance industry defines risk as something measurable. It is variability within a set of known limits. You may have heard it referred to as standard deviation or even volatility. Ultimately, it represents how much an investment wiggles…
Since the development of the capital asset pricing model (CAPM) about 50 years ago, academic researchers have documented several hundred “anomalies” that generate a significant positive alpha. There are now so many that professor John Cochrane referred to them as the “factor zoo.” There are certainly large incentives to find these anomalies, both for academics…
An overwhelming body of evidence clearly demonstrates that past performance isn’t prologue, which presents a problem for investors who believe active management is the winning strategy. Without the ability to rely on past performance as a predictor, there is really no way to identify ahead of time the few active managers that will go on…
Calm water makes a lifeboat drill much easier. We aren’t fighting the waves or the fear we feel during an emergency. Still, if the worst happens, and the drill becomes reality, at least we’ve rehearsed. We’ll know exactly what we are supposed do. With the markets relatively calm, now is the perfect time for an…
Diversification is often referred to as the only “free lunch” in investing because, when done properly, it allows investors to improve risk-adjusted returns. This principle applies not just to diversification across U.S. stocks, but to investing globally. The choice to purchase securities internationally helps mitigate the economic and political risks of investing in only a…
A reader asked me to comment on a recent Forbes article titled “Active Versus Passive Management: Which Is Better?” The author, contributor Peter Andersen, asks this question while observing that, in 2014, the vast majority of active fund managers underperformed the S&P 500 Index. However, he also notes that there have been periods “where active…