The Dollar Game Is Rigged
You’re getting less than $0.20 on a 1971 dollar. You can see the decline in my chart. And based on the Fed’s rock-bottom interest-rate policy, there’s no reason to believe it’s getting any better. That’s why you want to study the Wall Street Journal op-ed by David Malpass. He writes: Wednesday’s... Read the full story
Future Dividends, Coupons, and Principal
Your purchasing power is your lifeblood in retirement. On my office credenza is The Theory of Investment Value by John Burr Williams, first published in 1937. Chapter five is titled “Evaluation by the Rule of Present Worth, Section I. Future Dividends, Coupons, and Principal.” Burr writes: [D]ividends,... Read the full story
Owning the Best Performers
In its quarterly funds report printed on January 9, The Wall Street Journal lists the 45 largest stock and balanced funds by assets. The best performers of this group for 2011 were a gold ETF, SPDR Gold (GLD), up 11.2%, and a balanced fund, the Vanguard Wellesley Admiral shares (VWIAX), up 9.7%. The... Read the full story
Random Short-Term Markets
There’s no shortage of financial soothsayers out there selling their wares. Some of their sales tactics are relentless. I know because my customers tell me. I also read until my eyes feel like they’re about to fall out of my head. The sheer magnitude of news and financial data to dig through daily... Read the full story
Your 2012 Bond Fund Resolution
I hope you made some good money in bonds last year, because it was not a good year for all bond funds. Through November, Bill Gross’s Pimco Total Return Bond Fund, perhaps the most widely held bond fund in 401(k)s, underperformed 90% of its peers, according to Morningstar. Morningstar estimates outflows... Read the full story
Hedge Fund Bubble
You’re going to love this. Hedge funds had a terrible year. As of mid-December, the Dow Jones Credit Suisse Core Hedge Fund Index was off 8%. The index is an aggregate of funds using seven different hedging strategies: convertible arbitrage, emerging markets, event driven, fixed-income arbitrage, global... Read the full story
Dividend Religion
Here’s a shocker: Sun Life, Canada’s third-biggest insurer, will stop U.S. sales of variable annuities and life insurance to individuals at year-end due to “unfavorable product economies.” In other words, you’re not the only one getting slammed by the Fed’s artificially low interest rates.... Read the full story
Bond Dilemma
You might as well throw darts at the financial pages. To Burton Malkiel, who authored the book A Random Walk Down Wall Street, picking stocks is about randomness. He believes that all knowable information is priced into stocks and bonds when you buy them. I’ve been reviewing my sixth edition of Random... Read the full story
Best Buy Annuities
You don’t want to forget your sunglasses. I made that mistake before going in to a Best Buy recently. Blinded by the bright lights, I felt like I was in an airplane hangar with a wall of TV echoes to match. It’s no surprise to me the stock is off by 50% in five years. The same HD marketing blitz... Read the full story
The $100,000 Range Rover Boom!
You can go to a local U.S. Range Rover dealership this weekend and buy a nicely equipped Range Rover HSE for $85,000 or a Supercharged for over $100,000. If you finance it in U.S. dollars, at least you know what you owe. If you want to be as fancy as your new car, you can borrow in a foreign currency... Read the full story
