Three of four investors have unrealistic expectations of the level of care that financial advisors at brokerage firms are required to give. Seventy-six percent of investors said “financial advisors” at firms such as Merrill Lynch and UBS should put the client’s interests first, found a survey conducted by several consumer organizations. However, brokers do not have a fiduciary duty to […]
With interest rates so low, where do you put cash now?
Savers have been frustrated by super-low short-term interest rates since the 2008 financial crisis forced central banks worldwide to slash rates. Despite forecasts that government stimulus spending and rising national deficits would spark inflation and higher rates, inflation and interest rates have remained stubbornly low. What is a saver who wants a decent interest rate to do? The chart of […]
It’s a great time to buy stocks, says noted financial historian
One of this country’s preeminent financial economists and historians believes the stock market is a great buy today. In fact, when compared to similar periods over the last 200 years of stock market history, all of the unsettling events of recent years have contributed to the market’s positive prospects, says Jeremy J. Siegel of the Wharton School and author of […]
Client Letter – Q2 2010
During the past quarter, global stock markets ended their year-long rally and experienced their first major correction since the crash of 2008. Despite strong corporate earnings reports, global investors reacted to the European debacle, the Gulf oil spill, Goldman’s troubles with the SEC, and worries about a possible double-dip recession. The following chart shows the 3-month, 5-year, and 10-year performance […]
‘Flash crash’ of May 6 exposes the dangers of ETF trading
On May 6, the stock market suffered a massive drop in stock prices that took the Dow Jones Industrial Average down by 1,000 points in a matter of minutes before recovering much of the loss. Although market participants and federal regulators still cannot explain what happened, some popular new investment vehicles’ exchange traded funds, or ETFs—have lost a bit of […]
REITS provide portfolio diversification
Investors who own a typical stock and bond portfolio don’t have to go too far to find a handy diversifier. Shares of real estate investment trusts are traded on the major exchanges just like any other stock. However, unlike other stocks that represent ownership of companies, REITS offer ownership in commercial real estate. They give shareholders access to a steady […]
How to succeed in retirement: Stocks and 4 percent withdrawals
How to invest a nest egg and what is a safe withdrawal rate are the two biggest questions for anyone in or near retirement. Although the answers are far from simple, a lot of recent academic research continues to shed light and offer guidance to the perplexed. The uncertainties of future inflation, investment market returns, and individual life expectancy can […]
Client Letter – Q1 2010
During the past quarter, we are happy to report that the market recovery that started in March 2009 has continued. U.S. small stocks and real estate investment trusts had the best performance for the quarter, earning about 10% during the last 3 months. Large U.S. stocks and international small stocks earned about 5% during this time. Take some time to […]
Worried about the future of the United States? Invest overseas
Many investors are worried about the declining position of the United States in the global economy. The dollar has been on a long-term downtrend, federal budget deficits and international trade deficits keep going up, and the country has lost many of its basic industries to overseas competitors. While disconcerting, these trends offer plenty of opportunity to an investor because their […]
Don’t believe the myth of the stock market’s “lost decade”
We have been hearing the hype for over a year: the 10-year period from 2000 through 2009 was a “lost decade” for stock market investors, featuring two large bear markets and a cumulative loss on the Standard & Poor’s 500 Index of 9 percent. It is true that some investors did not have a good experience over the last 10 […]
