It’s now been more than five years since our last recession. This most recent recession, caused by the financial crisis, officially began in December 2007 and lasted until June 2009, a period of 18 months. It was the longest of 12 recessions, identified as such by the National Bureau of Economic Research, occurring in the…
Early in my career, I worked at a large brokerage firm. My job included answering calls from people with questions. One question kept coming up: What does your Individual Retirement Account return? The first few times, I thought it was a joke. But it didn’t take long for me to realize that people just didn’t…
Earlier this summer, I was on a hike with a friend and mentioned that while we’d started at about 9,000 feet, we’d reach an elevation of 12,000 feet by the end of the trail. My friend replied, “That’s a fact I just don’t believe.” Yes, it sounds silly, and of course, we laughed about it….
“People have always been captivated by quests,” writes author Chris Guillebeau in his brand new book, The Happiness of Pursuit. Chris, for one, is most certainly one of those people. His book celebrates the completion of a personal quest to visit all 193 countries in the world before his 35th birthday. Are the rest of…
Today I’d like to take a look at some important concepts contained within Daniel Pink’s bestselling book, A Whole New Mind. His focus on the ascendance of right-brain thinking fits squarely into our continuing conversation about ways to best train our youth to meet the financial, educational and career challenges facing the Millennial generation. My…
It’s not easy having conversations about money. Carl Richards, director of investor education for the BAM ALLIANCE, says they can “leave us feeling confused, misunderstood, and even angry.” That doesn’t mean you are better off not having these talks. In his book, “The Behavior Gap: Simple Ways to Stop Doing Dumb Things With Money,” Carl writes…
Last year, a piece by Michael Kitces and Wade Pfau made the claim that mechanically increasing the equity allocation during retirement — which they term a “rising glidepath” — could reduce the likelihood that a retiree outlives his or her assets and could decrease the magnitude of shortfall when capital market returns disappoint. Specifically, the…
Earlier this summer, I was on a hike with a friend and mentioned that while we’d started at about 9,000 feet, we’d reach an elevation of 12,000 feet by the end of the trail. My friend replied, “That’s a fact I just don’t believe.” Yes, it sounds silly, and of course, we laughed about it….
Boomer Esiason is busy—I mean, really busy. “Starting next Tuesday, all the way until after the Super Bowl in 2015, I think I’ve got about four days off,” he told me. Why, then, was he anxious to talk about financial planning and life insurance? It’s because he has a message for today’s youth: “Protect your…
A large majority of investors have seen their portfolios underperform simple buy-and-hold strategies, despite having followed the stock-picking and market-timing advice of so-called experts. These “experts” include pundits, gurus and forecasters such as Bill Gross, John Hussman, Nouriel Roubini, Meredith Whitney and, yes, even Jim Cramer. Investors confronting subpar returns are left wondering, “What went…
The academic literature is filled with challenges to the efficient markets hypothesis. Perhaps the greatest among these challenges involves the existence of momentum and the poor performance of small-growth stocks and high-beta stocks. Beta is defined as the measure of the systematic risk of a security or a portfolio in comparison to the market as…
No one has a clear crystal ball allowing them to accurately forecast the future. So, it’s a good thing that predicting the results of Standard & Poor’s twice-yearly active-versus-passive scorecard doesn’t seem to require one. It’s a pretty safe bet that the results in each new scorecard — officially called the S&P Indices Versus Active…
Research shows these funds are not producing enough returns to cover trading and operating expenses. I’m not going to make you wait for the punch line. Your single biggest investment mistake is owning any actively managed funds. That’s where the fund manager, through stock picking and market timing, attempts to beat the returns of a…
A well-thought-out financial plan is necessary for successful investing, but even the greatest plan won’t bear fruit if an investor doesn’t have the discipline required to stay the course, rebalancing and tax-loss-harvesting as needed. Unfortunately, even thorough and intelligent plans will sometimes end up in the trash heap because investors lose heart when their strategy…
Your mutual fund manager has a solid plan for retirement. So far, it’s working beautifully. Your fund manager is fortunate to be part of a growth industry. Since 2004, assets under management have grown 124 percent. The number of U.S.-based stock and fixed income mutual funds has grown to more than 5,000. Collectively, they manage…