It’s a simple fact: investors abhor losses. They engage in all sorts of strategies and practices in order to avoid or minimize losses. At the same time, investors are often excitable and greedy. When a segment of the investment market goes through a prolonged upswing, they throw money at it as they chase recent returns. Many academic studies, as well […]
The richest control even more of the world’s wealth
The continuing concentration of wealth recently has caused even President Bush to lecture the New York Stock Exchange about the dangers of income inequality. In the United States back in the 1960s, the top 1% of households had a net worth that was 125 times greater than the average household net worth. Today, the net worth of wealthy households is […]
IRAs are now charitable giving tools
IRA owners who don’t think they will use all of their accounts in retirement have been given a brief opportunity to make charitable gifts directly from their accounts. A temporary tax rule approved this year allows IRA owners who are 70.5 or older to contribute up to $100,000 to a charity without recognizing the contribution as taxable income. Direct contributions […]
International diversification continues to increase returns and reduce risk
Happy New Year! The year 2006 was a great one for equity investors around the world as stock prices rose in 46 of the 50 countries whose equity market returns are reported by MSCI. Among these, only Israel,Jordan,Thailand, and Turkey saw their local stock market indexes slump for the year. The 2006 return for US stocks was 15.32% according to […]
Client Letter – Q4 2006
Happy New Year! The year 2006 was a great one for equity investors around the world as stock prices rose in 46 of the 50 countries whose equity market returns are reported by MSCI. Among these, only Israel, Jordan, Thailand, and Turkey saw their local stock market indexes slump for the year. The 2006 return for US stocks was 15.32% […]
The real financial threat in retirement comes from inflation
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 […]
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 […]
