When asked to name the greatest invention in history, Albert Einstein responded, compound interest. Over three decades ago I started our family investment counsel firm focusing on the miracle of compound interest to help retired and soon to be retired investors just like you. My short and quick goal was, as it remains today, safety of principal and a consistent flow of income through investors’ long and peaceful retirements. In J.R.R. Tolkien’s The Hobbit, when the wizard Gandalf asked Bilbo Baggins to take part in an adventure, the Hobbit told Gandalf that he viewed adventures as “… … [Read more...]
Getting on the Map with Gold
I have been a longtime supporter of including gold in diversified portfolios. Gold is a safe-haven asset, an inflation and currency hedge, and a hedge against geopolitical turmoil and general market turbulence. It is an insurance policy of sorts. When everything else is down, gold is often up. Gold’s counterbalancing effects can dull the pain of a market rout. We have seen shades of gold’s counterbalancing power over recent weeks as both stocks and bonds have sold-off while gold prices have risen. I’ve long been an outspoken advocate of owning gold (I say owning because I buy gold … [Read more...]
Get Rich Slow with This Strategy
Most “get rich quick” schemes end up turning into “get poor quick” schemes. Reach too deep into the risk pool and you’re likely to fall in. I knew that 30 years ago, and in 1988 I wrote: I’m an ultra-conservative investor at heart…and by intent. I know my reputation in the industry puts me in the most cautious camp possible, and that’s just swell with me. My motto has always been, “Get rich slowly with compound interest.” At even a 7% rate of return, money doubles in about ten years. In IRA, Keogh and other retirement accounts, over half of total return should come from dividends and … [Read more...]
Rising Interest Rates Clobber Investors as Stocks Collapse?
Utter nonsense. But can you spot the “charitable” word in my headline? The key word here is the word investors. Most financial market participants, whether professional or amateur, are not investors at all. Rather they are more akin to Vegas-like speculators. Real Investors have a long- term game plan based on compound interest, cash flow, balance and patience. In my over five decades of investing, I have never once sold out of the financial markets based on unfolding events or some predictions of future events. The truth is, after so many decades of buy and hold, I could be … [Read more...]
Don’t Manage Your Money Like This
In September of 1992, I outlined the tragic story of a MLB slugger, Jack Clark who had misspent his money and wound up in bankruptcy. I wrote: It’s Time for Bankruptcy Not for you of course. No, I’m writing to you about bankruptcy for Jack Clark, Boston Red Sox slugger, but this story carries a lesson for most of us. Now here’s a guy—a good guy, too—with a three-year Red Sox contract worth $8.7 million. And yet Jack is bust. He has listed $11.5 million in debts, versus only $4.8 million in assets. Clark owns 18 automobiles, including a $717,000 Ferrari. He dumped over $1 million into … [Read more...]
LVMH: One of My Favorite Companies in the World
Next week I am heading to Paris to spend two weeks visiting LVMH retail locations in Paris, and each of the Palace Hotels, as well as the vineyards of Burgundy. In the case of LVMH, the company controls one of the world’s best portfolios of luxury clothing, Champagne and liquors. It is virtually unrivaled. The very best just never goes out of style. Reports the Wall Street Journal: Investors seem to be looking for any excuse to sell luxury stocks just now. This week it was slightly underwhelming third-quarter sales numbers from luxury conglomerate LVMH LVMUY -9.07% Moët Hennessy … [Read more...]
Commit This to Memory
Bond yields are rising, tech stocks look shaky, emerging market currencies are tanking, and in the midst of the longest bull market in history, September property sales in Manhattan are down 39% compared to 2017, with median sales prices falling 9% during that time. There are some warning signs flashing. What should you be doing now to prepare for a future downturn? In April of 2002 I wrote: Here is a historical goody that will offer you much comfort. In every stock market downturn since 1950, with one mini-exception, intermediate-term U.S. Government bonds have risen. Talk about the power … [Read more...]
It’s Time For Investors to Focus on Treasuries
It’s time for investors to focus on Treasuries. As stocks tumbled 3% yesterday, Sinead Carew wrote at Reuters: NEW YORK (Reuters) - U.S. stocks tumbled on Wednesday, with the S&P 500 marking its biggest daily decline since Feb. 8, and technology stocks led the losses as rising U.S. Treasury yields sent investors fleeing from risky assets. The Dow Jones Industrial Average .DJI fell 831.83 points, or 3.15 percent, and the Nasdaq Composite .IXICdropped 315.97 points, or 4.08 percent, to 7,422.05. Read more here. … [Read more...]
Here’s the Investing Advice I’d Give a Professional Athlete
This is the advice I gave professional athletes and my readers twelve years ago about how to make your retirement dollars last a lifetime. I wrote: I advise you regularly to invest only for dividends or interest. I want you to insist on getting paid, as I do. If you want to speculate with a portion of your capital, that's fine, but do not mess with your primary stash of cash. When you retire, your earning years are over. Kaput. You earn no more. Therefore, every dollar you have the day you retire must be treated with the deepest reverence. Treat each dollar as you would a family member. Would … [Read more...]
You’ll Never Know It All, But Know Enough
Don’t try to be a know-it-all investor. Building a solid foundation on diversification, patience, value, and compound interest, has always worked for me, without having to “know it all.” In 2003 I explained my deliberate method of focusing on dividends and interest to generate compound interest, writing: Invest for Dividends & Interest I’m not a speculator or trader, and I don’t offer strategies for either group. Work hard, invest your hard-earned savings regularly for interest and dividends, and let your investments breathe. Let them take the air. Let them work for you as a … [Read more...]
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