Illiquid Intervals
When University of Chicago professor Eugene Fama says that Wall Street comes out with something like a new product per week, he’s not too far off. Most of the latest artfully designed investment products are not intended to help you as much as they are designed to help the sellers.
For The Next Four
We will soon have a new president. What should you do now? I know the temptation is to meet strong emotions with some kind of action, but hold on.
Active Delusions
As real investors (as opposed to speculators) have started realizing that actively managed mutual funds cannot, in aggregate, beat the market - because the math just doesn’t work, those who make a living picking stocks and timing the market are grasping for a lifeline.
Tricking Teachers
Some of the worst retirement plan investments are those offered to teachers. Who is to blame? The identity of one of the culprits may surprise you.
Ignore "History on the Run"
When news breaks and markets move, content-starved media often invite talking heads to muse on the repercussions. Knowing the difference between this speculative opinion and actual facts can help investors stay disciplined during purported “crises.”
CDeception
Most investors are familiar with Certificates of Deposit (CDs). Unfortunately, Wall Street’s product pushers have figured out a way to swipe the name from this traditional household workhorse and turn it into a monster money-maker … for themselves, that is.
On Elections and Equities
Next month, Americans will head to the polls to elect the next president of the United States. While the outcome is unknown, one thing is for certain: There will be a steady stream of opinions from pundits and prognosticators about how the election will impact the stock market
Is It Really Guaranteed?
Often making smart investing decisions is more about knowing what not to believe. Take the term “guaranteed.” What does it mean for real investors? In reality, a guarantee is nothing more than a promise.
We Don't Know We Don't Know
In this political season, I’ve read multiple reports that we are politically ignorant with large percentages of American’s unable to even name the three branches of US government. While this knowledge gap might lead to poor election decisions, there is another lack of knowledge that can ruin your life, financial knowledge.
Even More Education
This has been a crazy summer with the creation of the first printed magazine in the country devoted to real investing. The first issue of real investing journal - the magazine went out in late June and the second quarterly issue just went to press.
DFA on Brexit
Dimensional Fund Advisor's global market experience is unmatched in the money management business so their perspective of the Brexit referendum and its potential economic impact deserves attention.
Brexit Wrecks It?
After last week’s Brexit referendum and its surprising outcome, it’s hard to watch the news without feeling your stomach twist over what in the world is going on. Whenever the markets scream bloody murder, your instincts deliver a sense of unrest ranging from discontent to desperation. Resist those emotions!
Funny Money
Sometimes something is so sad, you just have to laugh. John Oliver of HBO's Last Week Tonight is one of the few people that can make a serious and sad situation laughable. We we excited to see him focus on the sorry state of the financial advisory industry in America.
Erasing Bad Results
One of the tricks used by the actively managed mutual fund industry is to close down a poorly performing or merge it into a better fund, thus erasing that fund's performance from the group's performance history. This results in misleading results and claims about the manager's past through what is called "survivor bias."
Indexed Annuities: The Big Lie
I started researching indexed annuities back in 2009 when my wife alerted me to an ad she heard on the radio. It was for an investment that claimed to offer incredibly high returns, around 12%, with no risk to your principal. She stated that it sounded a lot like an ad that Bernie Madoff might have run if he had used radio advertising.
Risk Realities
Is investing riskier than usual these days? In our experience, probably not. If there is such a thing as “normal” in this world of ours, risk is certainly built into the definition. Besides, investors often love and hate risk in a mixed up, messed up relationship. How so? Let us count the ways
The Science of Investing
Most of what passes for investing information and advice isn’t. The majority of what you hear, see, and read about building wealth is designed to encourage you to turn to experts who claim to be able to predict the future or generate high fees for Wall Street. Financial soothsaying has no basis in science. It is more like money alchemy. Like the alchemists of the past, those we have believed to be investing “experts” have consistently been proven wrong.
Fixed Income: Stop Chasing Yields
Rather than stretching for extra yield with stand-alone solutions, we typically suggest taking a total-return approach, seeking an appropriate risk/reward balance among all sources for earning and preserving your investment returns. These include tending to share value, interest and dividends, and aggressive cost management.
It's About Time: More to Do Right
When a hard-won historic milestone is achieved, it’s usually front-page news: Apollo 11’s “one giant leap for mankind.” The fall of the Berlin Wall. Martin Luther King’s “I have a dream.” … Last week’s fiduciary ruling by the Department of Labor (DOL) requiring that anyone offering you advice about your retirement assets will be legally required to do so according to your highest interests, regardless of any conflicting incentives or dual roles they may have.
Finding Financial Help
The vast majority (over 99%) of those who provide investing advice are not always required to recommend what is best for you or act in your best interests. Most are product-peddlers, not true advisors. Costs can run over 5% of your assets up front and up to 3% every year. Rather than leave your future to the whims of a chance encounter, you must actively seek out those advisors who are likely to do the best job for you at a reasonable cost. Here are a few questions you must ask to help find the best investment advisor for your future.