A word of caution, dear investor, about money market funds: they’re not all created equal. In fact, when it comes to your lazy cash, you want to treat it with kid gloves. There’s a reason it’s on your couch. The world’s a dangerous place. Yes, you want to get it into the big wide world to do something productive with its life. But you also don’t want it coming home one day saying: “I gambled, and I owe Mr. Big $20k. Can you help?” Back when the financial crisis unfolded, Lehman Brothers failed, panic set in, and money markets “broke the buck” (trading below a net asset value of $1). But … [Read more...]
How Long Have You Been in the Investment Business?
“How long have you been in the investment business?” he asked. “Most of my adult life,” I said. “Did you know when you were my age (18) what you wanted to do?” “Not really. I went to business school at Babson College, worked at Fidelity Investments, and I’ve been here for 25 years.” “That’s cool,” he said. “My grandpa and grandma tell me all about you guys.” ………… Here’s the longer version. Growing up, we always talked about business at home. But it wasn’t about money. My dad would talk about interactions with customers he’d had that day, and because this was pre-internet, … [Read more...]
Yes, Your Children Are Listening to You
Dear reader, You may not realize this, but your kids/grandkids are listening to you. How does Your Survival Guy know? Because they tell me. More on that in a minute. Yesterday, for example, I spoke with a daughter and son-in-law of yours and, later in the day, a grandson. The first conversation was focused on traveling along the road to saving for retirement, while the other was about starting out a lifetime of saving and building a career. “But we don’t have enough to meet your minimum,” they always say. “There is no minimum for you,” I say. “Once a member of your family is in the … [Read more...]
What Your Survival Guy Invested in Today
You Survival Guy made a not-so-insignificant six-figure investment this morning in a mix of stocks and bonds. It’s a balanced approach, with roughly one-third stocks and two-thirds bonds yielding close to four percent. This is the type of mix I like for my retired clients, and for me, at age 50, it’s time to have more bonds in my portfolio, and this accomplishes that. The other motivation is you need to strike. You must take action when opportunities are right in front of you. Don’t fall victim to inertia. Whenever I have a large pile of cash to deploy, my first question is, “What can I … [Read more...]
Biden Administration Destroying Retiree Fiduciary Protections
The Biden administration is undermining fiduciary protections created by the Trump administration to protect retirees from money managers who would use their wealth to push the radical progressive agenda rather than to secure the savers' retirements. Now, 25 state attorneys general are suing to stop the Biden administration. Keith Griffith reports for the Daily Mail: The Republican attorneys general from 25 US states have filed a lawsuit challenging the Biden administration's plan to allow retirement fund managers to make 'socially conscious' investment decisions. The federal suit filed on … [Read more...]
Suddenly, Holding Cash Looks Good Again to Many
In The Wall Street Journal, Hardika Singh explains that investors are finding new interest in cash. She writes: The dash for cash on Wall Street is back on. Investors have added about $135 billion to global money-market funds over the past four weeks, according to EPFR data through Jan. 18. That is the best stretch since the four-week period ended May 2020, when those funds logged roughly $175 billion in net inflows. A money-market fund is a form of mutual fund that invests in short-term debt securities including Treasury bills and commercial paper. Companies and consumers often use … [Read more...]
Stocks Go Up and Down: Get Paid Along the Way
Time flies when you’re having fun. But don’t tell that to the investors who got crushed last year. All of a sudden they’re seeing the light—the wisdom in a balanced portfolio. As Ben Graham taught us, you need to have some balance in your portfolio whether it's 30-70 or 70-30 or something in between. I’m reading now how investors need to think about 60-40 after all the hand-wringing about the approach last year. Look, stocks go up, stocks go down. I want you to get paid along the way. The same is true for bonds but with a finish line, especially for individual bonds, in the form of a set … [Read more...]
The Importance of a Balanced Portfolio
For the person who can handle the slow and steady road to wealth, the importance of a balanced portfolio cannot be overstated. In 2011, I coined the phrase “Sleep Well-esley at Night” to capture the safety first, survivalist manner of the balanced Vanguard Wellesley fund. It’s not an exciting fund. After all, close to two-thirds of the Vanguard Wellesley fund is in bonds. The rest is in stocks. The fund's performance over time is a testament to the power of a balanced portfolio. You can see in the chart above that during Vanguard Wellesley's long performance history, the fund has … [Read more...]
Do You Have $500,000 in Savings? Avoid This Nightmare
Originally posted August 2, 2022. Do you have $500,000 in savings? Is it working for you, or is it stuck in the summer doldrums taking up space in your house? Don't let another day go by without seriously considering a conversation with Your Survival Guy about putting your lazy cash to work. Look, there's a reason I'm writing to you, and that's to help you survive and thrive in all aspects of your life. But it's easy to let the money stuff sit around and do nothing. You can only read so much. At some point, you gotta do something. Inertia is the investor's worst nightmare. Take, for … [Read more...]
If You’ve Been with Me, It’s Been a Good Year
If you’ve been with me, it’s been a good year, and the future looks just as good. As Your Survival Guy, I’m focused on you keeping what’s yours—what you’ve made during a lifetime of work and saving. If everyone could remember how hard it was to get to where they are and lock it in their brains there’d be a lot less heartbreak when it comes to money. Remember, I’m Your Survival Guy. I’m just fine living in a cave as the world passes by. Let it. I’m focused on return of assets first, then, and only then, the focus is on return on assets. And let’s get this out of the way. If you’re concerned … [Read more...]
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