With market volatility creeping upward, this is once again a question I'm getting, but I urge you to reread what I wrote back on February 28, 2018. Well this was a fun month for the stock market with wild swings from high to low of around 2,000 points in the Dow Jones Industrial Average. One question I’m asked on a consistent basis is “E.J., is your phone ringing off the hook?” and my answer is “no,” and I know why. Most of you have been educated by Dick Young that investment success is achieved over a lifetime, not a month or two. Investment success is about hitting singles and … [Read more...]
Wealth Management: Year-End Planning
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...]
Wealth Management Pitfall: ESG, Part II
Earlier this week, I wrote to you about the pitfall of environmental, social and governance investing, or ESG. Thousands of investment firms have signed a pledge to follow ESG and abide by a United Nations sponsored statement of principles. The problem here is multifold. First, your investment advisor should act as your fiduciary not an environmental activist with your money. Second, the number of state pensions that have signed this pledge is appalling. Not only are these pensions underfunded, but the administrators are using other people’s money (retired teachers, police, and firemen … [Read more...]
Cryptocosm and Life After Google Part V
Operations Management? When I was at Babson College one of our core curriculum courses was Operations Management. And, at the time, I didn’t see the vast opportunities that would unfold from this course. Who wants to spend a career figuring out how to piece together a supply chain or re-tool a factory? Then, when I had an internship at an online grocery delivery start-up, I recognized how fruitful a career in Ops could actually be. Fast forward to today and if you’re an Ops wizard, companies like Walmart or Amazon want to talk with you. Sometimes it’s hard to see the forest through … [Read more...]
Inflated Assets for All and to All a Good Night
Looks like the Fed is keeping the punch bowl full for the holidays with a cheery: “Inflated assets for all and to all a good night.” We’ll see how this plays out when the going gets tough next year. The Fed is already in the danger zone. Originally posted on Your Survival Guy. … [Read more...]
My Concerns as Money Piles Up at Vanguard
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...]
Is There Anything Better than This at Christmas?
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...]
Vanguard GNMA Up, Nasdaq Drops 3.8%
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...]
Vanguard Founder Jack Bogle Sounds the Alarm on Index Funds
You pay attention when the founder of the Vanguard Group, Jack Bogle speaks. As the father of the index fund it would be hard not to include Mr. Bogle’s bust on the Mount Rushmore of financial legends. Therefore, when Bogle speaks, I listen. As do thousands of his groupies known as "Bogleheads." “There no longer can be any doubt that the creation of the first index mutual fund was the most successful innovation—especially for investors—in modern financial history,” writes Bogle here, “The question we need to ask ourselves now is: What happens if it becomes too successful for its own … [Read more...]
Maximize Your Retirement by Leaving Income Taxes Behind, Part II
You may recall this piece I wrote to you, Maximize Your Retirement by Leaving Income Taxes Behind. A reader friend of mine wrote and asked why our favored state of New Hampshire didn’t make the cut. After all, he noted, what’s not to like about no sales or ordinary income taxes? Agreed. But unfortunately, NH does levy a five percent tax on dividends and interest—a form of income especially in retirement. There’s always room for improvement. New Hampshire legislators introduced SB 404 on March 15, 2018, which would have phased out the five percent tax over a five-year period and ultimately … [Read more...]
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