Having dinner last night, my father-in-law Dick Young asked, “Survival Guy, what’s investing mistake #1?” “I don’t know yet,” I said. “Let me tell you about living off your portfolio. It’s hard,” he said. “I’ve been writing about this my entire adult life. I didn’t expect how tough it would be to generate income. It’s expensive staying at Le Bristol, so you better figure out a way to make it work. I’m just getting comfortable. How’s your dinner?” … Part of my inspiration for this series came from reading past issues of Richard C. Young’s Intelligence Report. Each issue was packed … [Read more...]
Search Results for: Investing mistakes
Investing Mistakes to Avoid: #11 FOG
Your Survival Guy knows a thing or two about getting stuck in the fog. When I was a kid sailing with my family, we were heading home after a weeklong trip, and about halfway through Buzzards Bay, we were engulfed in fog. We held our course and, before long, entered a mooring field holding no boats that we recognized. Realizing land wasn’t far, and that we were in the wrong harbor, we decided not to press our luck. We tossed out the hook and spent a comfortable night right there. The next morning, after the fog cleared, we learned we were a few harbors west of our own. Not long after, a … [Read more...]
Investing Mistakes to Avoid: #2 Tomorrowland
When I was a kid, some of my favorite memories were vacations to Walt Disney World and going on Space Mountain—repeatedly. Then after every ride, I’d stand on the conveyor belt and look at Tomorrowland and think about how cool it would be to someday live in space. That’s a long time ago now, and here I am writing to you from Earth, still wondering if that will ever happen. Maybe. But a lot of investing days and years have passed since then, and if we could time travel from the 70s, investing in stocks would have been a good move if—and that’s a big if—you had time. Just … [Read more...]
Investing Mistakes to Avoid: #3 Back 40 Back
Your Survival Guy and Gal saw Luke Combs on Saturday night at Gillette Stadium in Foxborough, Massachusetts. The song I can’t get out of my head is “Back 40 Back.” Combs didn’t play it (it’s not the song to keep a stadium on its feet), but it’s a reminder of the way life used to be—when there was a back 40 of land or open space that has too often now been replaced by a concrete jungle. I’ve been thinking about when I was a kid, going to Fenway Park to see Jim Rice, Dwight Evans, Carl Yastrzemski, and Fred Lynn. The old Boston Garden, where you could hear and smell the game. Memories of … [Read more...]
Investing Mistakes to Avoid: #4 Mr. Happy Yappy
Like in school, investors should get rapped on the knuckles for not keeping their eyes on their own portfolios. But investors are sensitive to the "other" guy. Investors hate missing the boat. Nothing irks them more. They're fine hearing that someone else is doing worse. But when someone else is smiling carefree and yappin' away about their good fortune, that makes investors' blood boil. Nothing makes the phone ring more than a down quarter. In my conversations with you, we spend time talking about how you, not anyone else, got to where you are. We talk about why you're looking for an … [Read more...]
Investing Mistakes to Avoid: #5 History
When Becky and I were married 25 years ago, we were 26 years old. If you add up our ages, we had 52 years of life experience. Then, we had our first child, and all that experience was kicked to the curb. And then, just when we thought we had everything pretty much under control, we decided it would be a good idea to have another one. Going from one to two isn’t linear. Two kids are many multiples more difficult. Which brings me to my next investing mistake to avoid: Kids. Kidding. They read this. No, the investing mistake to avoid: #5 is History. Don’t think just because you know a few … [Read more...]
Investing Mistakes to Avoid: #6 3X QQQ
If you live in New England, you know how unpredictable the weather has been this summer. Just the other day, we were cruising back from lunch in Edgartown, MA, through Vineyard Sound and, before reaching Woods Hole, were engulfed in a fog bank. Your Survival Guy has radar, but even with that, I worry about the speed and actions of other boaters I can’t control. I throttled back, making our marks slowly, and in less than 20 minutes, we were in clear air moving through the Hole. It happens that fast. Which leads me to my next investing mistake to avoid: Don’t be in a rush to make money. Time … [Read more...]
Investing Mistakes to Avoid: #7 DEI DOA
Your Survival Guy puts in a solid effort to recycle his trash weekly. Rolling out the blue bin to the curb makes me feel good and a bit anxious, wondering if they can track me down for misallocated debris. But, when it comes to my money, I don’t want ESG (environmental, social, and governance) or DEI (diversity, equity, and inclusion) separated from the fiduciary responsibilities. Sure, ESG and DEI might feel good and provide good copy during PowerPoint presentations. But it’s more sizzle than steak. And what about their job as fiduciaries? It’s why I look at all this ESG and DEI as dead on … [Read more...]
Investing Mistakes to Avoid: #8 “Get Back”
Last year (2022) was brutal for the major averages (not including dividends): Nasdaq -33.1%, Russell 2000 -21.6%, S&P 500 -19.4%, and the Dow Jones Industrial Average -8.8%. But not all investors hung around to see things through. And you know this song: Markets are back up this year. Let’s rewind. When the going gets tough, the capitulation begins. And in my observation, a breaking point is reached when a portfolio goes below a certain number. It has nothing to do with the major averages per se. It has everything to do with dollar signs. Will we have enough to live on? And the … [Read more...]
Investing Mistakes to Avoid: #9 Hobbyist or Hobbit?
“We are plain quiet folk and have no use for adventures. Nasty disturbing uncomfortable things! Make you late for dinner!” said Bilbo Baggins to Gandalf in The Hobbit. Which leads me to “Investing Mistakes to Avoid: #9 Hobbyist or Hobbit?” This is a story about a recently retired investor. The hobbyist investor. The most dangerous one of all. You see, it’s the recently retired investor who, with a fresh outlook on life, thinks he doesn’t need “experts” to guide him. Who yearns for one more bite of the apple. Who imagines himself scoring with artificial intelligence or high-yield … [Read more...]
Investing Mistakes to Avoid: #10 Picked Off First
Your Survival Guy has compiled a list of investing mistakes to avoid. It's a list for highly successful, fairly wealthy investors. Today's lesson is what I refer to as "Picked off first." Do not get picked off first base. When you have some money, or in my example, get a hit, you need to protect yourself. You can't afford to be picked off and sent to the dugout. But it happens with far too much frequency because investors are caught sleeping. Here's what I'm talking about. One of the first things you learn about investing in bonds is the risk-free rate of return. You can see it below. … [Read more...]
January RAGE Gauge: “THE MOST Dangerous Investing Environment in My Lifetime”
Good morning from post-winter storm Gail. Your Survival Guy is safe and sound. Not much of a snowmaker here in Newport. But the snow is pretty, especially this time of year. Let me know how you're faring in your neck of the woods. In my conversations with you, you're telling me about your own island life you've created, and I thank you for that. You're telling me you're getting lost in your reading, doing a lot of thinking, and looking forward to when your band gets back together this Spring. In the meantime, your island life is alive and well. You understand you don’t need to spend a lot … [Read more...]
After the Coronavirus: Successful Investing and Good Health
Coronavirus Infects Stock Market: Part XXXI Let’s get this out of the way: There is no magic bullet to successful investing or to good health. Both are a culmination of decisions leaving you with a body (of work) to show for it. Is there any doubt those most susceptible to COVID-19 have a weakened immune system? Is there any doubt those most susceptible to investing mistakes take risks? What’s scary is, both groups oftentimes don’t even realize their precarious state. They don’t see the risks staring back at them in the mirror. They believe, for example that passive index funds … [Read more...]
Just a Few Problems I See with AI Portfolios: Part II
As I wrote to you yesterday, “How much Artificial Intelligence do you want in your portfolio? Your Survival Guy doesn’t want it anywhere near mine. But AI is already in the sports pages with a recent Ohio high school football recap written with the heart of a Tin Man. How much longer until we have ivory tower dwellers and woke politicians writing the rules for investments? What could possibly go wrong?” Here’s some more I’ve come up with. AI, I’m on a fixed income. Can you help? AI, I want a conservative mix of stocks. AI, I want a portfolio that is oriented to Main Street … [Read more...]
A Simple Plan to Feel Better Tomorrow
The one way for you to beat inertia is to take action. We all have dreams about who we want to be and how we want to live, but actually doing something about it can be hard. Taking action is doing something. If you have money collecting dust in a low-interest-bearing bank account, consider opening an account with Fidelity. There’s a cornucopia of money funds to choose from. Fidelity’s Treasury Money Market, for example, yields about five percent. You can simply go to Fidelity.com, but don’t leave Your Survival Guy in such haste. Read my Top 10 Investing Mistakes to Avoid (and one bonus … [Read more...]
Don’t Be Average, Be Better: Avoid This Mistake
You bet it’s an exciting time to be a fixed-income investor. But I’ve been telling you that for years. You don’t have to compound big numbers to be a successful fixed-income investor. You need to harness time and let the magic of compound interest do the heavy lifting. What never fails to amaze Your Survival Guy is how the average investor always wants more, more, more. When rates are at levels you can sink your teeth into with some peace of mind and comfort—look at treasuries—they reach for yields that are double that with terrible credit ratings. Good luck. Because it’s in times like … [Read more...]
“An Insurance Company with an Army”
Scary headlines aren’t necessarily wrong, but one mistake to avoid is not being prepared at all times. Spencer Jakab explains in The Wall Street Journal how the federal government has become a heavily indebted "insurance company with an army." He writes: Now, though, the government’s pile of debt has swelled following the War on Terror, the global financial crisis and the Covid-19 pandemic. Low interest rates and Fed bond buying masked the strain: Interest costs recently were no higher than in the early 1990s as a share of federal spending. But the Treasury barely seized the … [Read more...]
This Belongs on a Loved One’s Fridge
Your Survival Guy recently featured the prudent man in this piece “Investing Mistakes to Avoid: #3 Back 40 Back.” As you know, dear reader, I write to you about what I think I know, personal experiences (not all good), and life in general. As a fiduciary, I look to the prudent man as one of my personal guides. If someone you love would benefit from his wisdom, send this along. It’s perfect for the fridge. We’re in this together. A timeless piece from The WSJ: Adam Smith, “The Theory of Moral Sentiments” (1759): The prudent man always studies seriously and earnestly to understand … [Read more...]
Expect Your Advisor to Fight Tooth and Nail for You
When Your Survival Guy sees major financial institutions asking how they’re doing (in the form of a questionnaire), it makes me think their complaint box overfloweth. Service is key in times like these. It’s my belief investors want their money fought for tooth and nail, not fighting political ESG and DEI wars. Investing Mistakes to Avoid: #7 DEI DOA Your Survival Guy puts in a solid effort to recycle his trash weekly. Rolling out the blue bin to the curb makes me feel good and a bit anxious, wondering if they can track me down for misallocated debris. But, when it comes to my money, I don’t … [Read more...]
RAGE Gauge July: Don’t Forget History
Your Survival Guy's RAGE Gauge for July is still pegged at maximum risk. Americans are troubled about the state of play in their country today. With an uncertain war in Europe, an uncertain economy at home, and a government that seems determined to encroach on their liberties, is it any wonder? Dissatisfaction with the state of the country is high, despite low unemployment, which would usually dampen Americans' worries. What does it mean when people are fully employed and they still don't feel like things are going the right way in America? It's not a good sign, historically … [Read more...]