Making fewer, more focused decisions with your portfolio is a vastly superior strategy when compared to ill-considered rapid fire trading in and out of stocks. In July of 1997, I wrote about the benefits of a minimalist approach in life. The moral of the story being, the less you spin, the more you win. Here’s what I wrote then: MONK!... That’s it. Four letters say it all. Thelonious Sphere Monk died on 17 February 1982, over 15 years ago. Still today, when the name Monk comes up in Jazz circles, no explanation is needed. From his early days in the San Juan Hill West 60s section of New … [Read more...]
A Record Breaking Stock-Market
While I was speaking with clients this morning, we reviewed the current stock market and what may lie ahead. We talked about the record start to the year, with the S&P 500 on track for the best first four-months in more than three decades. We also talked about the bond side of their portfolio, and the role it plays. To me, this feels like what the late-great Richard Russell would refer to as the third phase in the bull market. The first is the low-hanging fruit, then the moderate advance—both climbing a wall of worry—into the “we can’t afford to miss the boat” third phase, when … [Read more...]
Want to Double Your Money in Investing? Read This First
Over my five-decade career in investing I have placed high value on on-the-ground intelligence gathered from real people. That’s why Debbie and I have spent so much time travelling in America and abroad, meeting business owners and retirees, and talking to everyone from VIPs to bus boys. Each has a story to tell and information to provide. Along our way, Debbie and I have been to some of the world’s most interesting places. In November of 1995, I wrote to readers about our trip to the Biltmore Estate. Read my account here: The Largest Private Residence in America Biltmore Estate, … [Read more...]
How Many “Retirees” Will Keep Working?: Today’s Elderly Twice as Likely to Work than in 1985
Americans aren't saving enough. That's not all their fault. The Fed has kept interest rates low, depriving savers of decent rates of return on their savings. And a decade of misguided monetary policy hasn't managed to get wages growing very much. So many Americans who would prefer to retire, cannot. They are being forced to work into old age, and today elderly Americans are twice as likely to be working as they were in 1985. Bloomberg's Suzanne Woolley reports: Just as single-income families began to vanish in the last century, many of America’s elderly are now forgoing retirement for the … [Read more...]
New Jersey Opens a New Front in the Fiduciary Fight
Over the last few years the battle over the fiduciary duty of financial advisors has been fought at the federal level, but now New Jersey, a state that is home to many financial firms, is opening a new front in the war. New Jersey's governor wants to force financial firms registered in New Jersey to adopt a fiduciary standard. I encourage all investors to find advisors held to a fiduciary standard, as it's the only way to ensure an advisor has the clients' best interests in mind. Other advisors held to the much lower 'suitability standard' could be more willing to fill their clients' … [Read more...]
Dead or Alive? The Future of Long-Term Investing: Part III
“If the phone doesn’t ring it’s me” -- Jimmy Buffett It’s funny how time heals temporary temptations and laps of reason. I wrote the piece below on October 16, 2014. Then the Dow was down from a recent peak and investors were scared. But those who followed their long-term investment plan and didn't panic, made it through. Yesterday the Dow closed at 26,157.16. Investors who panicked and sold missed all that. Tomorrow markets could drop again, but if you prepare yourself with a diversified, income focused portfolio and the determination to stick to an investment plan that avoids risk whenever … [Read more...]
Two Strategies to Avoid Outliving Your Money
In July 2007 there was a sense of unease in the markets and I was warning investors to prepare themselves with a low draw on their portfolios. I also gave investors two ways to help prevent outliving their money. Read here: 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 time periods from 1926 on. I have … [Read more...]
The Yield Curve Inverted: Time to Panic?
If you have been reading the financial papers or watching CNBC, you have seen the news that the U.S. yield curve has inverted. Typically, this is a sign of a coming recession, and that could be the case today. If, though, you have been following my advice, there is no reason to panic. Have patience and rely on the diversified, counterbalanced portfolio you have built for generating dividends and compound interest. In August of 2013 I explained the power of counterbalancing in your portfolio: Managing a common stock portfolio takes— above all else—patience. Your goal should never be what to … [Read more...]
The Arithmetic of Losses: A 68% drop this Century
In his April 2000 issue of Dow Theory Letters, the late-great Richard Russell wrote about the arithmetic of losses noting that Nasdaq had dropped about 68% from the previous year’s peak. To get back to even, he noted, Nasdaq would have to climb more than 170%. As many of you know that didn’t happen for a long-long time. “Note that CNBC,” explains Russell, “and many other sources continue to talk about a stock’s climb in percentages. But this can be misleading and frustrating. Example: you buy a stock for $50. In the bear market it drops to $2—you’ve lost $48 plus commissions. Then you … [Read more...]
Bad Blood
If you want an inside look into how money is lost then read Bad Blood by John Carreyrou. It reads like fiction about blood testing start-up Theranos and its founder Elizabeth Holmes where high profile billionaires and investors with “access” lose every penny invested. Read extended excerpt from Wired here: ALAN BEAM WAS sitting in his office reviewing lab reports when Theranos CEO and founder Elizabeth Holmes poked her head in and asked him to follow her. She wanted to show him something. They stepped outside the lab into an area of open office space where other employees had gathered. At … [Read more...]
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