Much is being made of the Administration’s tax reform proposals. It’s the usual politicized rhetoric. Democrats argue it’s a tax cut for the rich. Republicans argue a small percentage of taxpayers pay a large percentage of taxes so, logically, the largest portion of a tax cut will benefit those paying the most taxes. Been there, [...]
In an interview with CNBC the Oracle of Omaha disclosed that his investment vehicle (Berkshire Hathaway) is delaying taking profits in anticipation of a tax cut. Right now we're sitting and watching because within three months, actually less than that, we'll know the answer on it . . . I would feel kind of silly [...]
Should a financial relationship be about doing what’s right or feeling good? The former, right? Not so fast. A survey by index zealots DFA found the #1 thing valued in receiving financial guidance is a “sense of security / peace of mind.” Not that that’s a bad thing of course but at 35% of respondents [...]
The stock markets hit all-time highs on a seemingly daily basis. Investors are puffing out their chests proclaiming they’re not only buying and holding but adding to their equity positions by buying the dips. It’s easy to buy and hold in an up market. The question is . . . how many investors will stick [...]
As summer wanes and we power towards Labor Day we’re left with a couple of realities: the days are hot the news cycle is slow Hot days find us seeking A/C and a cool drink. Slow news cycles make us overreact as the insignificant suddenly seems anything but. Lately we’ve been bombarded with the usual. [...]
Although investors claim to accept market fluctuation as normal we find precipitous selloffs overwhelming. Why? . . . because they happen rapidly and randomly. Lost in the sea of emotion is that equity market annual returns have been mostly positive despite significant market declines in each year. Since 1980 the average intra-year pullback in the [...]
Semantics? No! Bull markets end when the smart money (i.e. buying based upon fundamentals) changes its perception of earnings growth. Markets “crash” when the dumb money (i.e. buying based upon recent performance) will no longer chase prices higher than already inflated levels. Where has the smart money been? It’s followed businesses benefiting from increasing earnings, [...]
Telephone. A game many of us played when we were kids. The message starts out as “today is my birthday” and by the time it is communicated to the last in line ends up as “purple monkey dishwasher.” It’s a comical game when we’re children but, as adults, we find the wide chasm between sender [...]
As companies shift away from defined-benefit retirement plans (i.e. we’ll pay you $x per year for the rest of your life) towards defined-contribution plans (i.e. you contribute x% per year) an inducement for employee participation is the company match. It’s that free money 100% ROR of which we’d be foolish not to take advantage. One [...]
This chart supported by Vanguard’s own data is indicative of the explosion in popularity of passive investment strategies. Short-sighted investors focused myopically on fees and benchmarking (which will end badly for them should a downturn send them scurrying for the door at the same time) have made Vanguard a dominant force in corporate governance. How [...]