If you want to teach your grandchildren how get beyond some of the most difficult challenges an investor can face, then do the following: Open up an account for them at either Fidelity or Vanguard. They'll learn over the years that it’s good to be aligned with leaders in the industry. Next, buy the Vanguard Wellington fund (you can do it through Fidelity too) and have the statements delivered by mail, not online. Every month your grandchilden will get a statement as a reminder that they're an investor. Help them add to it on an annual basis so they can see the mechanics of dividend payments … [Read more...]
Archives for September 2014
Monday Melee: Strong Rail Traffic
Rail Traffic Signals Strong Growth What we're Reading Worst Things to Buy on Amazon (Kiplinger) Here's Why Fed Needs More Diversity of Opinion (Yahoo) The house made from 4,000 video cassettes and two tonnes of jeans (The Guardian) … [Read more...]
Yields at Highest Level in Years
Don’t look now, but interest rates are at a more than three-year high. Short-term interest rates that is. The yield on three year treasury notes has crossed the 1% threshold. I know, a 1.08% yield for three-year paper is nothing to brag about, but it could be worse. From late-2011 to mid-2013, the average yield on three-year treasury notes was 0.35%. Do you know how long it takes to double your money at a 0.35% interest rate? I’m going to tell you. It takes 199 years. If you are putting away money for the grand kids, better change the will to make it your great, great, great grand kids. At … [Read more...]
The $2 Billion Game
When I was at Babson College I took classes in entrepreneurship studies and worked at a start-up company. This video with Markus Persson, creator of the game Minecraft, gives you a wonderful example of a true entrepreneur. Persson or “Notch,” as he’s known to my kids and probably yours too, created Minecraft because creating games is what he did since he was eight. As you’ll see, being an entrepreneur is less about business plans or presentations to vulture capitalists—it’s about doing what you love to do and what you have to do. It's why a writer writes a story or a singer writes a song. It … [Read more...]
How to Save Your Retirement Portfolio
I must have been 17 at the time. I had recently sold the little Nissan Sentra I drove during high school and I bought a sports car. Every teenager’s dream, right? A hot new sports car just as I was getting ready to head off for college. Think of all the possibilities. Well sort of. It was a 1987 Pontiac Firebird. Okay, so maybe I didn’t have the most refined taste in cars. The Firebird was a 2.8 Liter V6 automatic with power steering. Quite a bump up in performance from the manual transmission 90 HP Nissan Sentra with power-assist steering. The Sentra had the power of a John Deere … [Read more...]
Who’s Winning the Ugly Contest?
Over recent years, investing in the world’s largest currencies has been a game of picking the ugliest currency. The dollar, the euro, and the yen all have structural flaws. The question for investors has been which one is the ugliest. Last year, the yen won the ugly contest. This year it looks like we are going to crown a new winner. The euro has fallen by about 6% versus the dollar compared to a 1.1% drop for the yen. … [Read more...]
The Yoda of Drums
Investing is more art than science—it’s a feeling. The late legendary drummer Freddie Gruber would teach about being in the moment to his students. To him how you approach your trade was just as important as the act itself. … [Read more...]
The Monday Melee: The Longest Bull Markets, and Coffee
The Longest Bull Markets in the DJIA's History What We're Reading: Where you get the most bang for your buck (TaxFoundation.org) Free iPhone 5 Battery Replacement (Gizmodo) #Buffett, tax the rich, but not me (Wall Street Journal) Warren Buffett's Tax Whopper (Wall Street Journal) The Great American Oil Rush (visual.ly) Go Global. North America a dividend yield laggard (GaveKal Capital Blog) Here's Why #Fed Needs More Diversity of Opinion.(Yahoo! Finance) Worst Things to Buy on Amazon (Kiplinger) Did You Know: Everyone's on Drugs? "According to the latest data from the National … [Read more...]
The Most Overrated Economic Indicator
The monthly employment report was released today. The headline payroll number in the employment report is probably the most overrated economic indicator released each month. Investors put far too much emphasis on a monthly data point that is revised twice in the following two months and then again once every year. In an economy with over 140 million workers, the Bureau of Labor Statistics attempts to determine how many jobs were added each month. Then it guesses at how many were added at businesses that it doesn't survey, and layers on top of that a seasonal adjustment that again skews the … [Read more...]
Moving the Goods?
Take a look at this Federal Reserve induced recovery. … [Read more...]