It’s New Year’s Day 2012. In addition to overdosing on televised college football, you’re spending part of the holiday working on the family finances. Armed with a laptop and various online financial tools, you’re on the hunt for appealing stock market opportunities. To prune the list of candidates to a manageable size, you decide to focus on firms that are […]
Rebalancing: Hard to do but worth it
Much research has supported the benefits of regularly rebalancing a portfolio. It suggests that an investor should start with a target asset allocation and then regularly sell or buy individual holdings in order to keep that allocation steady. For instance, suppose the investor starts with 50 percent in stocks and 50 percent in bonds. A year later the stock market […]
Dollar cost averaging vs. a lump sum: Which creates more wealth?
One of the oldest tricks in the investment book is dollar-cost averaging (DCA). This technique suggests that investors will do well over time by slowly investing fixed sums of money into the markets at regular periods. By doing so they will take advantage of the low buying points while not putting too much money in at any one market top. […]
Client Letter – Q4 2012
Wow…what an amazing end to an interesting year! Despite a steady diet of bad news, most markets around the world climbed the proverbial “wall of worry” to log strong returns. Major markets around the globe delivered double-digit total returns, and as a group, the non-US developed and emerging markets outperformed the US equity market. The following chart shows the 1-year, […]
Retirees lose out on Social Security
Many retirees are claiming their Social Security benefits too early and losing out on their chance to maximize benefits, according to figures compiled by the Social Security Administration. It’s latest statistics covering 2010 show that almost 44 percent of men took their benefits as soon as they were able to at age 62. Another 26 percent took benefits after 62 but […]
“Echo Boomers” could give a big boost to the stock market
The Baby Boom generation born between 1946 and 1964 has dominated investment markets since the 1980s. They struggled for an economic start during the repeated recessions between 1973 and 1982, but then helped to propel an 18-year bull market as they reached their peak earnings power in the 1990s. Now some market observers worry that the Baby Boomers are dragging down […]
2012: The Year It Didn’t Happen
Judging by the headlines in the financial press, investors spent much of the past year anxiously awaiting one calamity after another that failed to occur. The plunge off the so-called fiscal cliff was averted. The euro zone did not fall apart. China’s economy and stock market did not crash. The bond market did not implode. The re-election of President Barack […]
The Top Ten Money Excuses
Human beings have an astounding facility for self-deception when it comes to our own money. We tend to rationalize our own fears. So instead of just recognizing how we feel and reflecting on the thoughts that creates, we cut out the middle man and construct the façade of a logical-sounding argument over a vague feeling. These arguments are often elaborate, […]
Client Letter – Q3 2012
During the past quarter, the world-wide equity markets performed fairly well, helping our 1-year returns look very strong. 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, 2012 DFA Fund / Index 3 Month Return 1 Year Return […]
Another Wall of Worry
Stock prices rallied sharply around the world in the third quarter, with forty-two out of forty-five countries tracked by MSCI showing positive returns in US dollar terms. Total return exceeded 10% in nineteen different markets, while Ireland, Japan, and Morocco registered minor losses. For the twelve-month period ending September 30, 2012, forty markets had positive returns, with six countries—including the […]
