One of the “must dos” for any serious investor is to make sure your investment house is in order as year-end quickly approaches. Ensuring that you have the best technology is an important way to do that, and I have found through years of experience with different custodians that Fidelity has always been the industry's technology leader (this is not a paid endorsement, just the truth learned from my experience). Fidelity's technology leadership began in its earliest days, pushed on by former Chairman Ned Johnson's passion. I recently wrote about Johnson's focus on technology that "He … [Read more...]

Last week Vanguard founder Jack Bogle spoke out about the dangers of index funds, something he helped pioneer. Take a look back at this piece I posted on October 12, 2017 for more depth on the issue.  Let the good times roll? Great lyrics from the Cars but it’s a song I can’t get out of my head thinking about the money piling up by the truckload at Vanguard’s back door. We’re talking nearly $300 billion in the first nine months of this year alone. All of that money unloaded and stacked up with the rest of the $4.7 trillion at the firm. That’s a lot of confidence in one company. And maybe … [Read more...]

As Christmas approaches is there anything better than an ice-cold oyster and a sip of Prosecco? For me, it’s the combo that reminds me of Summer while Newport is frozen. It’s the counterbalance that makes it fun and it’s the Prosecco that keeps more money in my pocket for compounding. Understanding both concepts, counterbalance and compounding, are key for us all as I explain here: Yesterday’s trashing in the stock market offers us a chance to review the arithmetic of losses and the value in a counterbalanced strategy. Technology shares as represented by the Nasdaq composite index lost … [Read more...]

Yesterday’s trashing in the stock market offers us a chance to review the arithmetic of losses and the value in a counterbalanced strategy. Technology shares as represented by the Nasdaq composite index lost 3.8% on the day. Let’s say, for example you began the day with $10,000 in Nasdaq. By late afternoon, when the market closed, it was worth $9,620 or down 3.8%. You now need (not a good word in investing) a gain of 4% to get back to even. Now, imagine a string of ten days like yesterday, or a 38% decline. A 61% gain is needed just to get back to even, or where you began with … [Read more...]

You may have read Rich Man, Poor Man—one of my favorite pieces ever written by the late great investment writer Richard Russell. It’s one of those timeless pieces that makes me feel like he’s still with us. And with the passing of President George H.W. Bush, I’m reminded of the sacrifices of the “Greatest Generation” and their unique perspective on life. You see, Richard Russell served in World War II, like President Bush, and knew what it felt like to worry about survival. He knew what it felt like to not know if he’d get out alive. And he remembered, for the rest of his life, those who … [Read more...]