There is a great deal of media coverage these days about new speculative approaches to making money and new speculative vehicles. For example, day-trading AMC and GameStop stocks influenced by Reddit subscribers and the hoopla around crypto currencies are two of the most popular media reports. Notice that I called these “speculative approaches” and “speculative … Read more
Many client meetings these days include a conversation about inflation. People are worried because two recent stimulus bills have pumped trillions of dollars into the U.S. economy. Not to mention, the White House and Congress are considering infrastructure spending which will put even more money into the pockets of workers. In addition, the most recent … Read more
We hear many clients tell us they believe the stock market is over-priced and ready for a correction. We don’t engage in trying to guess the future and we usually tell clients to stick to their investment plan. However, the persistent question got me to thinking how often to bear markets (a downside move of … Read more
In the first post on this topic, we defined diversification as spreading your investments among assets with differing return and risk potential. In this post, we’re going to discuss the benefits of diversification. To keep a portfolio spread among different asset classes, you will need to rebalance it regularly. Otherwise, some investments will get out … Read more
With all the noise around Bitcoin, GameStop and market tops, I like this illustration to remind investors of the twin towers all investors go between. Successful investing is the sweet spot between the two extremes.
Over the next few blog posts, we’re going to discuss the concept of portfolio diversification: what it is and isn’t, why it matters and how to do it effectively. What Is Portfolio Diversification? You may have heard the term “portfolio diversification”, but what does it mean? The Fidelity website provides a nice definition. It says, … Read more
90-year old Warren Buffett is the Chair of Berkshire Hathaway. He published his annual letter to shareholders on Saturday and you can read it at this link. In reading it, three things stood out to me that many people get wrong about Buffett and his company. Myth #1: Buffett Always Beat The Indexes Annual % … Read more
Two farmers, John and Paul, were sitting at John’s kitchen table one cold winter day. John has been a farmer for a long time and Paul is new. Paul says, “Our is mostly a dairy farm and we’re thinking about planting more than just corn and hay to feed the cows. How do you mix … Read more
Because the stock market has been on an upward trend in the second half of 2020 and the first month of 2021, it’s time to check your asset allocation. We’ve noticed the stock portion of many client portfolios are now 5% or more over their target asset allocation and therein lies risk. That is, if … Read more
This is a question we receive frequently from clients who are about to retire. There are pros and cons to paying off your mortgage before you retire. First, the plus side. Reduces the cost of housing and increases your positive cash flow. Guaranteed risk-free rate of return. Psychologically, it’s satisfying. The negatives: Reduced liquidity. You … Read more
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