Dear Fairly Wealthy Investor, You might be better off staying in bed. It's that bad. One morning, you wake up, and there's a full-page spread in the Wall Street Journal on the perils of a balanced portfolio. It reports how owning stocks and bonds in a 60-40 mix is dead. Nonsense. And it's not just them. When you're in the business of selling newspapers, newsletters, or email subscriptions, it's what gets attention that sells. Which is a disservice to you, my valued reader. You and I know investing is hard because we know the work it takes to save 'til it hurts. These guys are about … [Read more...]

There’s a tremendous amount of concern out there about the future of the dollar. I know this because you tell me in my conversations with you. And that’s why we talk. I want to know your concerns. And believe me, I know today’s concerns are different than yesterday’s. Welcome to current times. “Survival Guy, what’s your take on the U.S. dollar?” you ask, and I understand why. I get the same “the world is ending” emails you do. But as far as the dollar is concerned, it’s the nicest house in a bad neighborhood. The world’s a scary place today. You can’t even watch the news. And the hucksters … [Read more...]

Sorry to burst your bubble, but investing is math. Sure, prices are fun to watch, but they aren’t the math of collecting income from your stocks, bonds, or that nephew who owes you. That’s math. You can see the money, rent, dividends, income, and even crumpled dollars coming into your possession. That’s investing. Look at today’s yields on bonds. Finally, you can sink your teeth into them. You can plunk $100,000 in a one-year bond yielding five percent and be pretty sure, especially in Treasurys, you’re getting $5000  plus your original outlay at maturity. You can’t say that about prices. … [Read more...]

When I was a kid, we took a lot of trips to Disney World, and when we were there, we stayed at Fort Wilderness. One day, a day off from the parks, my dad and I rented a canoe. Floating near the shore, we noticed these little animals digging in the dirt with what looked like a shell as hard as armor. “Those are armadillos,” my dad said. “They're harmless.” They didn’t look harmless to me, and I was sure I didn’t need to see them up close, but he thought we should. As we got closer, I said, “Dad, that’s close enough.” “OK,” he said, “I’ll turn us around.” Easier said than done, as … [Read more...]

When you look at the long-term advance of stocks over the past four decades, an observation worth noting: It was good to be 24 in 84. Meaning if you were young and hungry and happened to work on Wall Street, the world was your oyster. Until it wasn’t. Risk was rewarded, and a fair amount of luck was involved, disguised as skill. Not that these weren’t wicked smart people like Mike Milken, for example, the father of junk bonds. Because it was Milken who showed corporate raider Saul Steinberg how to storm Walt Disney’s castle with high-yield debt. Steinberg, like Captain Hook, had a boatload … [Read more...]

When you look at today’s yields, you can finally say, “Self, this is your grandfather’s treasury bill rate.” Because it’s been a long time since we had rates that you can sink your teeth into. Yet, that doesn’t stop the howls and jeers for lower rates from the talking heads. “Houses are too expensive,” they complain. But you remember a time when your first mortgage rate was in the teens. You got through it. You figured it out. And here you are. In a world of instant gratification, where every asset was going up, and everyone was a stock market trader, now we’re seeing a taste of reality. … [Read more...]