Poor Millennials. Always getting picked on. A recent global survey by British asset management company Schroders found that most investors have rather unrealistic expectations. U.S. investors have the most inflated expectations of anyone in the world. Millennials (defined as ages 18-35) are the worst offenders. How do Americans stack up? The average European investor expects [...]
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, [...]
Back in 2015 we introduced you to myRA. Well, OK, Treasury under the Obama Administration introduced myRA but we sat down with "her" for this exclusive, in-depth interview. Well, myRA is no more. The program intended for people who did not have access to workplace savings plans is being discontinued. The program has been far [...]
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 [...]
In early June the first wave of the Department of Labor’s fiduciary standard went into effect. The rule requires professionals providing advice on retirement accounts to act in the best interests of their clients. In theory it sounds great but for it to be effective the public must know who is/isn’t a fiduciary . . [...]
In the short term many factors impact stock prices. In the long term stock prices are driven by the underlying fundamentals of the companies for which they are proxies. It’s an obvious truth but one many of us often forget. It’s why we’re so easily swayed when we look at short-term data and wrongfully conclude [...]
The flowers sure do smelly lovely. Will they lead to an unpleasant financial odor? Passive investing (i.e. indexing) is all the rage. Academics preach its virtue. They justify their existence by cranking out study after study concluding most managers don’t outperform the indexes all of the time. Massive mutual fund complexes (we’re lookin’ at you [...]
The powerful tax-deferral tool is likely nearing its end. WHAT IS STRETCHING: Sustaining and maximizing the tax-deferred status of an IRA when the beneficiary is a non-spouse such as a child. WHO LIKES IT: Beneficiaries who accrue years of compounded, tax-deferred growth while minimizing the Present Value of the liability (i.e. $1 in the future [...]