Here is a lesson to keep repeating to your children and grandchildren: it is easier to save $381 per month toward retirement than to save $5,778 per month. Seems simple, doesn’t it? Yet it might be the hardest financial chore a young person can undertake. The reward, however, is a secure retirement, rather than a decision to keep working or live […]
What is the secret to leading a financially successful and healthy retirement? Accumulate wealth while you are working and stay married in retirement. And, for the best individual outcome, die before your spouse does. Those are some of the findings of a study done by three economics professors at MIT, Dartmouth, and Harvard. It seems obvious that accumulating wealth is one of the keys to […]
The Chinese philosopher Confucius once said that life is very simple, but we insist on making it complicated. You could say the same thing about investing. Complexity in investing often comes with a lack of transparency. The highly engineered and multilayered financial derivatives that contributed to the global financial crisis five years ago are a case in point. For many […]
Interest rates around the world are at historic lows. They can only go in one direction from here, right? And aren’t rising interest rates bad for bond investors? The truth might surprise you. Central banks in developed economies have injected extraordinary stimulus into the system since the recession arising from the global financial crisis five years ago. The stimulus has […]
Professor Eugene Fama of the University of Chicago was recently awarded the Sveriges Riksbanks Prize in Economic Sciences in Memory of Alfred Nobel for 2013. Professor Fama began his work in the 1960’s and is considered the “father of modern finance” as well as the creator of the “Efficient Market Hypothesis.” Professor Fama demonstrated that stock prices are extremely difficult to predict and […]
As you work with higher and higher net worth clients, you are not selling anymore; you are building relationships,” declares Christopher Jones, founder and president of Sparrow Wealth Management, a fee-only firm based in Las Vegas. A former consultant, Jones initially built his client roster on existing relationships with former colleagues and their families. Now, he steadfastly avoids explicitly promoting […]
During the past quarter, the international markets performed the best, with modest returns in the U.S. markets. The chart below shows the 3-month, 1-year, and 10-year performance of many DFA funds (representing different asset classes) compared to the S&P 500 Index: Market Returns for the period ending September 30, 2013 DFA Fund / Index 3 Month Return 1 Year Return 10 […]
The stalemate over the federal budget and debt ceiling in Washington, D.C. has put the markets on edge and generated a lot of scary headlines. We are following events very closely, but we can make no certain prediction of the short-term outcome. We do know that if Congress does not raise the debt limit by Oct. 17 a technical default […]
Stocks markets worldwide declined Monday as the U.S. government faced a shutdown due to the Congressional budget stalemate. Today, markets rose, even though the shutdown occurred. Here are some considerations for investors: As long as this is a short-term event, it should have little economic or market impact. Political events drive markets only in the short-term; the economy and corporate profits […]
Five years ago this month the world’s financial markets endured one of their biggest crises ever. Lehman Brothers Holdings failed, igniting a firestorm. Within days the unthinkable occurred: Insurance giant AIG and government mortgage agencies Freddie Mac and Fannie Mae were taken over by the federal government. The storied investment house of Merrill Lynch was taken over by Bank of […]
