Ask the average person who is planning to retire and will have to depend on an investment portfolio for part of his income and he will tell you one of his biggest concerns: losing his principal. Then he’ll often add that perhaps it is time to get more conservative with his investments in order to avoid volatility that could destroy his […]
Year: 2006
Go into the 2007 stock market armed with Ben Graham’s wisdom
The beginning of a new year is a good time to take stock and to review basic investment principles. Anyone investing in the stock and bond markets could do no better than to review the timeless and valuable lessons taught by legendary investor Benjamin Graham. Known as the father of securities analysis and as Warren Buffett’s stock market tutor, Graham, […]
Falling life insurance costs are a boon to the underinsured
Many people like to avoid the subject of life insurance. Issues like personal mortality and confusion over what to buy along with high pressure sales pitches from hungry agents turn off potential buyers. It is estimated that millions of workers don’t have enough insurance to protect their families, while millions of others have none at all. Families with children are […]
Roth IRAs are opened up to everyone
Upper income retirement savers are about to get in on tax-free Roth IRAs beginning in 2010, due to a recently enacted tax law change. Roth IRAs promise completely tax-free withdrawals of principal and earnings in retirement, unlike traditional IRAs, whose withdrawals are taxed as ordinary income. When Roths were established, upper-income married taxpayers with incomes over $160,000 were prohibited from […]
Client Letter – Q3 2006
We enjoyed a strong quarter, despite the slow start in July, as evidenced in the chart below. Even large U.S. stocks (represented by the S&P 500 Index) did well this quarter, which was a pleasant surprise! Nevertheless, the international asset classes (small, small value, and emerging markets) still have the highest 5-year returns of any asset class. Also, bond returns […]
Bonds provide a safety net for your portfolio when times are tough
With all the sizzle and excitement in the stock market, bonds don’t always get the respect they deserve from individual investors. After all, how can you get excited over returns of 5% or 6% in bonds when you can have profitable periods of 25%-plus in stocks? It’s easy: when stocks hit their inevitable down periods, bonds can prop up a […]
A legendary manager of hedge funds warns investors away
When Michael Steinhardt tells you not to invest in hedge funds, you had better take notice. Steinhardt left the hedge fund business in 1995 after running one of the most successful funds ever. He wrote a recent guest editorial in The New York Times excoriating the industry’s marketing and warning most investors to avoid such funds. “As recent history shows, the outsized […]
Want high fund returns? Cut your costs
Mutual fund investors can improve their returns by focusing on the costs of running individual funds, says former Vanguard Investments Chairman John C. Bogle. “Costs clearly differentiate the superior performers from the inferior performers,” he writes. Bogle showed that costs matter in his newest book, “The Battle for the Soul of Capitalism” (Yale University Press, 2006). He did a study […]
The baby boom retirement wave may not punish the stock market
The largest generation in U.S. history is getting ready to retire, prompting dire predictions of a stock market bust. Some market observers worry that baby boomers will sell off large amounts of financial assets to fund their retirements, while smaller generations that follow the boomers will not be able to purchase those assets. The scariest predictions say the sell-off will […]
Buy and hold the indexes if you want to beat average investors
There are three truisms that keep finding new confirmation and that investors should ignore at their own risk: Buy and hold the market, don’t try to beat it. Index fund investors will beat most other investors. Stodgy value stocks usually beat sexy growth stocks. Two new real-world studies covering the U.S.market since 1957 dramatically illustrate these points. In one, the […]
