I was talking with my friend Diane recently and she told me a story about a visit she made to her daughter’s house. Here is her email recap of a portion of that visit: Continue reading “How Making Mac-n-Cheese is Like Investing”
This weekend, I watched my nephew play in a baseball tournament. They played very well in their first game, outscoring their opponent by more than ten runs. They played well in their second game too but an unfortunate mix up in fielding assignments when there were two outs cost them two runs late in the game that proved to be the difference. It was a hard loss and for the next few days, all I could think about was that one play. If only they had made that play they would have gotten out of the inning with the lead and quite possibly won the game. Continue reading “What Baseball Can Teach Us About Investing”
Last week, we looked at how the asset allocation process doesn’t have to be an overwhelming task and that a variety of options exist to create a diversified portfolio. As we continue to examine different ways to create an investment plan that matches your life goals, it is important to understand where you can turn to for asset allocation guidance. After all, financial literacy research studies demonstrate that most people do not have the financial knowledge and confidence to manage their own investments. Continue reading “Online Investment Platforms: Wave of the Future or a Passing Fad?”
There’s been a lot of buzz recently on the idea of investors using robo-advisors to manage their investment portfolios rather than human advisors. If you are not familiar with the term, a “robo-advisor” is an online financial advisory service that uses a basic investment philosophy to create software programs that can manage a person’s investment portfolio automatically. The argument for using this type of approach rather than a human advisor goes something like this: if an investment portfolio using fundamental investment strategies can be implemented automatically with a computer, then why pay for human involvement? Continue reading “Is Robo Advising Right For Me?”
It can be hard to figure out if the investment selections within your retirement plan investments are a good fit for your personal goals. The concept of diversification is usually represented by the phrase “don’t put all your eggs in one basket.” It makes perfect sense but how do you know which baskets are the best fit and how much do you put in each basket? Continue reading “Are You Choosing the Right Investments in Your 401(k) Plan?”
One of the most common pieces of investment wisdom is that you should invest more in conservative “loan” investments like cash and bonds and less in more aggressive “own” investments like stocks and real estate as you get closer to retirement. This may have made sense when bonds were paying 6% or more but with long term bonds rates now closer to 3%, this could actually make it harder to retire comfortably or more likely you could run out of money in retirement. Cash is paying less than inflation. Rather than to low-interest bonds and cash, why not shift towards high-yielding dividend stocks and real estate? Here are some advantages of this approach: Continue reading “Be an Owner Rather Than a Loaner in Retirement”
Last week, I wrote about different types of index funds and how some “index funds” aren’t as diversified or as low cost as they may seem. However, there’s also a case for certain types of diversified index funds that are designed to outperform traditional index funds. They come in two flavors: equal weight and fundamental index funds. Continue reading “Can You Beat the Market…With Index Funds?”
1979 – Happy Days was a popular TV show, disco clothes were in, and a top tune was Y.M.C.A. by the Village People. My husband recently relived all these memories at his 35th high school reunion for the Class of ’79. I got dragged along, but at least the classic rock and disco tunes were fun to listen to. Continue reading “Those Were the Days”
The 2014 World Cup started with a bang on Thursday with the host nation Brazil beating Croatia in a somewhat less than convincing fashion. National pride and hope is growing in the host nation of Brazil and across the globe with 32 nations vying for the World Cup trophy. Like many American soccer fans, I’ve enjoyed watching other countries play the past few days… but now the real fun, stress, and patriotism begins. The United States takes on Ghana today. Continue reading “Lessons from the World Cup About Diversification”
One of the most common bits of investment advice is to invest in index funds. But which index funds? Are all the index funds the same? If not, what should you look for in choosing an index fund? Continue reading “Not All Index Funds Are Created Equal”
In last week’s blog post, we examined the flexibility of Roth IRAs. Perhaps the most appealing feature of Roth IRA accounts is the tax-free growth of earnings. If you expect to be at the same or a higher tax bracket, the Roth IRA is definitely worth considering based on the prospects of future tax savings. Even if you don’t have a strong opinion as to where your future income tax bracket will be when you need access to your funds, it may prove beneficial to have this added feature of tax diversification. Continue reading “Should I Keep My Emergency Funds in a Roth IRA?”
One of the things that probably most surprises people about me as a financial planner is that I rent. After all, we’ve always been taught that renting is “throwing money away” while home ownership is a good long term investment and the hallmark of adulthood and the middle class. In my case, the fact that I’m a renter may be particularly surprising given that I’m also a real estate investor. So here are some of the reasons I’ve chosen to rent: Continue reading “Why I Rent”
Last week, I wrote about how I was able to buy a new set of clothes without breaking the bank. In the process, I realized something else too. It turns out that putting together a wardrobe is a very similar to putting together an investment portfolio. Here are some lessons I learned and how they apply to investing: Continue reading “How Buying Clothing is Like Investing”
Over the last couple of weeks, I’ve written about the advantages of investing in individual stocks and some tools to make the process simpler and easier. However, most people don’t invest directly in individual stocks. After all, it’s more time consuming and is generally not available in the employer-sponsored plans like 401(k)s that people generally do the bulk of their investing in. Continue reading “How to Invest in Mutual Funds”
Last week, I wrote about some of the benefits of investing directly in individual stocks. However, it can be challenging to decide which stocks to invest in. Here are some tools that can help simplify that process. Continue reading “Stock Investing Made Easy”
No, I’m not talking about “sell in May and go away.” If you invest in stocks, you probably do so through mutual funds. After all, they’re available in your employer’s retirement plan and you get a degree of instant diversification even if you don’t have much to invest. But here are some reasons you might want to consider investing directly in individual stocks: Continue reading “Time to Dump Your Mutual Funds?”
Back in college in the late 90’s, I learned a valuable lesson about managing risk when I got caught up investing in the dot com bubble. It was so easy to put up two thousand dollars and see it double or triple overnight. But the bubble burst a few years later and I was left with less money in my account than when I started. I cashed out of day trading, fortunately realizing before I had lost too much that this was not a viable long term strategy. Continue reading “The Risk of Not Taking Risk”
Yes, I’ll admit it. It’s embarrassing and I’m not proud of it but I will confess that I have spent hours playing Candy Crush Saga on my phone. Mostly at airports or on rental car shuttle busses, but I have played the game for more hours than I am proud to admit. Continue reading “My Embarassing Confession”
A couple of weeks ago, my colleague Michael Smith, wrote a blog post defending bonds called “What’s All the Fuss About Bonds Being a Lousy Investment?” With all due respect, I do think bonds are a lousy investment right now. Let’s take a look at each of Michael’s points as to why you shouldn’t avoid them: Continue reading “Yes, Bonds Are a Lousy Investment Right Now”
Every time I’ve talked with someone about their investment portfolio recently, the subject of owning bonds or bond funds has inevitably come up. Most of the time, the conversations about the fixed income (bond) portion of their accounts has been less than hopeful. And the cynicism/pessimism hasn’t been coming from me… Continue reading “What’s All the Fuss About Bonds Being a Lousy Investment?”
