Employees with 401k accounts flee from stocks in August

Some workers who invest in stocks through their employers’ 401k plans proved to be fickle investors this summer. In August—after sharp stock market declines in July—a near record amount of 401k money was yanked from the stock market, says Hewitt Associates LLC, a human resources consulting firm. Hewitt’s index of 401k investments showed that plan participants shifted $765 million from […]

Think you need a hedge fund for excitement? Better think again

For the last few years there has been a steady drumbeat out of Wall Street touting the advantages of “alternative” investments for well-to-do investors. The alternative crowd argues that plain old stocks and bonds and mutual funds are no longer good enough for sophisticated investors. Instead, they need a dose of hedge funds, private equity investments, and venture capital deals […]

Client Letter – Q3 2007

Despite a rocky start in July, your portfolio has fully recovered, as evidenced in the chart below.  The one year returns are as strong as any period during the past five years.  As I’ve said many times, you simply cannot predict the markets, and this quick recovery is a very welcome surprise!  While large U.S. stocks (represented by the S&P […]

Most retirees should have more money in stocks than they think

It is common for those planning for retirement to feel that they should make their investment portfolios more conservative once they leave the workforce. After all, they have to live off their nest eggs for the rest of their lives and can’t afford to lose money in a declining stock market. However, new studies continue to show that most retirees […]

Forget the dire predictions: Get invested for the long term

Since the subprime mortgage mess hit the markets like a bombshell earlier this year, economists and analysts have been working harder than ever to forecast its future effects. Forecasting potential outcomes is big business in the financial markets, and there is no dearth of “experts” and TV talking heads telling us what lies ahead. Their record of prediction is pretty […]

A handful of stocks offer high returns

Groundbreaking investment research from 1992—supported by other studies since then—indicates that value stocks and small stocks outperform the stock market as a whole. Recently, professors Eugene F. Fama of the University of Chicago and Kenneth R. French of Dartmouth—authors of the 1992 study—have identified another important component of stock returns: the higher returns of small and value stocks are due […]

It is the ‘unknown unknowns’ that will affect your portfolio

Among the many peculiar word constructions former Secretary of Defense Donald Rumsfeld is remembered for, there is one that applies to all forecasts of the future: the “unknown unknowns.” In his words, they are “the ones we don’t know we don’t know.” That phrase, incidentally, was already commonly used in the Defense Department and elsewhere in its shortened version, “unk-unk.” It […]

Minding Your Nest Egg

This article recommends that you do an annual checkup on your “financial well-being.” You’ll need to determine how much you will need for retirement and whether you are saving enough. Christopher M. Jones says that “you’re looking for educated guesses and ballpark numbers, not exact figures.” Read the Full Article