For my money the best balanced fund combination is a 50/50 mix of Vanguard Wellesley and Wellington. For clients I prefer a mix of Young Research's retirement compounder stocks and individual bonds and bond funds. The key difference from the Wellesley and Wellington mix is our stocks provide an eclectic group of international holdings and the bonds have a shorter maturity. But as you can see with my chart it's the balanced approach that gives you the confidence to stay in the fight. … [Read more...]
Words from the Wise
Richard Russell's timeless Rich Man, Poor Man has been there for me when I needed some perspective. I hope it will do the same for you. RICH MAN, POOR MAN: In the investment world the wealthy investor has one major advantage over the little guy, the stock market amateur and the neophyte trader. The advantage that the wealthy investor enjoys is that HE DOESN'T NEED THE MARKETS. I can't begin to tell you what a difference that makes, both in one's mental attitude and in the way one actually handles one's money. The wealthy investor doesn't need the markets, because he already has all the … [Read more...]
The Calm Before the Storm
You don't have to be able to predict the future to be a successful investor. But being armed with battle hardened advice can certainly help you become one. From Richard C. Young's Intelligence Report, July 2007 (subscription required): Your Portfolio Mix At the start, retired investors and investors saving seriously for retirement (76 million boomers will begin retiring next summer) must answer two basic questions: (1) What is the proper mix of stocks and bonds? (2) How much money can be drawn annually from an investment portfolio? I have used Ibbotson data and examined 20-year rolling … [Read more...]
The Intelligent Investor: Part III
“It is surprising how little attention has been paid by economists and by Wall Street to this development. The debt of corporations has expanded nearly fivefold while their profits before taxes a little more than doubled,” wrote Benjamin Graham in The Intelligent Investor. What Ben Graham was referring to was the expansion of Net Corporate Debt from $140.2 billion in 1950 to $692.9 billion in 1969—a fivefold increase—compared to the expansion of Before Income Tax Profits from $42.6 million to $91.2 million—only a little more than double. A fivefold increase in debt only to double profits … [Read more...]
The Biggest Buyer of Stocks
"Stockholders as a class are king. Acting as a majority they can hire and fire managements and bend them completely to their will." - Benjamin Graham, The Intelligent Investor Corporations have been buying back shares at a record pace, buying mores stock than any other group of investors today including: Hedge funds, foreigners, insiders, pension funds, insurance companies, and individual investors. In the first quarter of this year corporations purchased $188 billion of stock—the highest quarterly amount since 2007, according to Birinyi Associates. We all know how stocks did after … [Read more...]
Mission Paris
Last week I told you about The Best Table in Newport. After TSK, Chad Hoffer and Tyler Burnley felt Newport needed a good burger joint so they opened up Mission, which in no time created a cult like following. I had that confirmed on a recent trip to Paris, France. In May, Becky and I visited her parents Debbie and Dick Young who spent the month there. One of the many memorable dinners we had was on the Left Bank at L’Epi Dupin. It was a short walk from our Hotel de L’Abbaye and right near the famous Paris department store Le Bon Marche. I would have never expected such fine food except … [Read more...]
The Intelligent Investor: Part II
“You Can Observe a Lot Just by Watching”—Yogi Berra You may recall the summer of 1963 when The Beach Boys’ Surfin U.S.A hit #3 on the charts and the stock market was riding the tail end of a 1949 to 1964 wave, where it averaged a 10% return per year. Stocks were hot and that was it. End of story. Much like today. In 1964, as Benjamin Graham points out in his the book The Intelligent Investor, “Few people were willing to consider seriously the possibility that the high rate of advance in the past means that stock prices are ‘now too high’, and hence that ‘the wonderful results since 1949 … [Read more...]
The Intelligent Investor: Part I
“To me, Ben Graham was far more than an author or a teacher”, writes Warren Buffett in the preface to the 1973 edition of The Intelligent Investor, “More than any other man except my father, he influenced my life.” In a remembrance of Graham (1894-1976) published in the Financial Analysts Journal, Buffett wrote, “A remarkable aspect of Ben’s dominance of his professional field was that he achieved it without that narrowness of mental activity that concentrates all effort on a single end.” I received my copy of The Intelligent Investor as a Christmas gift back in 1997 from Dick and Debbie … [Read more...]
The Best Table in Newport
You’re in for a culinary treat at Thames Street Kitchen (TSK), especially if you sit at our favorite table—a huge-raised farm table—the table in the “farm to table” movement. The farm table literally feels like the place where the evening’s bounty is thoughtfully separated earlier in the day by chefs Chad Hoffer and Tyler Burnley. And while they’re in the kitchen creating masterpieces for you, there’s plenty of room for 8 or even better, a party of 10. The table is up high where you can take in the scene in the room and check out the action in the kitchen through the huge white paned … [Read more...]
Vanguard GNMA Up 40.6%
You’ve been rewarded for sticking with Vanguard GNMA. Over the last 52-weeks it has returned 5 percent and through the first half of this year it is up 4.5 percent. A lot of investors sold their GNMA last year when the Fed began its taper talk. And at the beginning of this year the so called experts said bonds were dead—making it even harder for you to hang in there. I’m glad you did. Aren’t you? Still all the chatter is about stocks. This week the Dow and S&P 500 both had record closings. Tech is way overbought and bonds are being left for dead, again. But the prudent investor would … [Read more...]
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