Please enjoy this 1-minute video (for those receiving this by email: please click on the blog title line above to view). Diversification and allocation are NOT the same thing, as I explain briefly in this post “Diversification explained simply.” Only a few, a small number, of firms actually apply the mathematics of diversification. They pay […]
Archive | General Investing
What’s the AIM of both investing and planning?
The aim of retirement planning while working is to accumulate shares. The aim of retirement planning once retired is to conserve shares! Both working or retired, the aim is share management! The value of each share goes up and down over time. Shares are the store of wealth. Dollars are simply a measure of spending […]
1-minute video: How Compound Interest Pays Off
Please enjoy this 1-minute video (for those receiving this by email: please click on the blog title line above to view). A primer on how compounding works. Over time, the effect is to have the money earned on your money, including interest, grow into ever larger sums. But, this takes time, so the sooner you […]
Investing? What’s the Bigger Picture?
Many people don’t see the big picture of investing. They can’t see the forest for the trees! Below are three (3) big picture things when it comes to investing. Many focus so much on returns NOW instead of what investing is supposed to do for them over the long term. Markets are always uncertain. The COVID-19 Coronavirus pandemic […]
Your Complete Guide to Factor-Based Investing – Review
What are factors for investing? How are they determined? Why are they useful? Your Complete Guide to Factor-Based Investing: The Way Smart Money Invests Today Paperback – October 7, 2016 by Andrew L Berkin and Larry E Swedroe discusses this. What are factors? “A numerical characteristic or set of characteristics common across a broad set […]
After-tax 401k’s vs Roths … and rollovers; they’re different!
Some plans offer “after-tax” 401k contributions. Aren’t these the same as a Roth 401k? Nope! There are three (3) different types of 401k contributions – IF your plan offers them … and each one has its’ own tax treatment: The 401k most people are familiar with. These are subject to the contribution limits each year. The […]
Why you may get different numbers -The Mathematics of Investing.
The imbedded report is a handy reference for those who want to calculate their own investment metrics such as yield and annual return. However, I must state … with important caveats. I would caution that calculating your own returns is fraught with miscalculations and misinterpretations! For example this article “Understanding the Link Between Volatility and Compound Returns” […]
The cost of indexing – and an approach how to reduce those costs
There is a cost to indexing that most investors are unaware of. It is called “reconstitution.” What is reconstitution and how may the costs involved be solved? What is an index? An index tracks changes in the markets – think of it kind of like a weather barometer. The first article below discusses how the reconstitution effect […]
DOW 20,000 … the more things change, the more they stay the same!
DOW 20,000. Is that good? Or is that bad? Guess what – this is simply another way point much like DOW 15,000 was, or DOW 10,000, or pick any DOW number. The Power of the Markets Markets don’t know your specific emotions and behaviors – so the markets march on ignoring them. It is best […]
Investing long term? Don’t overlook the inflation factor.
Even a low inflation amount can lead to loss of purchasing power over the long term. So investing (not savings – see last week’s post) is for the long term because investing also should overcome this insidious effect. Savings typically fall victim to inflation, while prudent investing does not. Here is a short article on […]