How you invest in stocks and bonds, in other words, your asset allocation can mean more to your investment success than what you invest in. Let me explain. When you look at risk/reward as measured by my efficient frontier, you can see by the fish hook how having your eggs in one basket can mean more risk. Obviously, 100% in stocks will be riskier as measured by a portfolio’s ups and downs or standard deviation. But what’s not always clear is that having 100% in bonds can be riskier than a mix of, say, 20% stocks/80% bonds. As you see above, this efficient frontier is a combination of … [Read more...]
ESG Pushback Lands in Europe
You have watched as American politicians and business leaders have pushed back against the ESG movement to protect shareholder returns. Now, the movement to put shareholders ahead of politics has made it to Europe. Niall O'Shea and Hugh Wheelan report for Reuters: March 14 - Ignored, ridiculed, embraced, sanctified, attacked. If you’ve been living it for long enough, it’s hard not to see the grim humour in the parable of ESG. That catch-all term, which covers “sustainable”, “responsible” and “impact” investment, is nursing a splendid hangover, and having to contemplate the consequences of … [Read more...]
Hochul’s Exercise in “Security Theater”
Radical progressive politicians like NY Gov. Katyh Hochul have enabled criminals for years, and now that Americans are irate over the crime and homelessness in their streets, Hochul & Co. are desperately attempting to put the genie back in the bottle. But, at City Journal, Dorothy Moses Schulz explains that Hochul's efforts are "security theater." She writes: New York is abuzz with media coverage of a horrifying incident on a Brooklyn subway train. One male rider provoked another, screaming threats and invective. He began attacking the man before the two were separated by some other … [Read more...]
“And I’ve Never Forgotten,” His Nephew Told Me
You never know when you’re going to pick up a nugget of wisdom. Wisdom that can last a lifetime. In a world loaded with information, wisdom is in short supply. Don’t confuse the two. Your Survival Guy was speaking with a client this week. He’s in his early sixties, and he’s ready to retire in a year or two. We talked about his portfolio, his savings, his 401(k) that he’ll roll over to Fidelity, his asset allocation, and how we’ll transition it when he needs to begin drawing from it. “You know how I feel about asset allocation and the efficient frontier,” I said. “I know you’ve been … [Read more...]
TUCKER EXPLAINS: Rand Paul and the Plan to Ban TikTok
In an interesting and educational segment, Tucker Carlson and Sen. Rand Paul discuss the plan to ban TikTok or force it to change ownership and the implications that could have on free speech in the future. Watch: The people who’ve handed our country to China are banning TikTok to protect you from China? Probably not. So what’s really going on? Rand Paul joins us to explain. pic.twitter.com/XRe7fvqoOw — Tucker Carlson (@TuckerCarlson) March 14, 2024 … [Read more...]
Bernie Sanders Wants a Day Off
Sen. Bernie Sanders is attempting to pass a law that would shorten a full work week from five days (40 hours) to four (32 hours). Jennifer Liu reports for CNBC: The act would shorten the standard workweek over four years by mandating that overtime pay kicks in after 32 hours worked in a week, down from the current 40. Those who work more than 8 hours in a day would get overtime pay at time-and-a-half, and those who work more than 12 hours in a day would be entitled to double their regular pay. Today’s 40-hour workweek has been federal law since 1940 following the passing of the Fair Labor … [Read more...]
Your Retirement Life: Walk Like a Modern Day Warrior
Looking over your shoulder is no way to live. Wondering who's behind you. Wondering if you're safe. Feeling uncertain. Uncomfortable. It's scary. Instead, walking with your head up, eyes forward, and shoulders back is the stride of the modern-day warrior. You never tire. You have the same confidence tomorrow as you do today. You're comfortable with who you are. You don't worry about the other guy. You stick to your game. We make enough tough decisions in a day to keep our lives too busy. Take figuring out "what to watch tonight?" for example. It can shake one's confidence. Then, finding … [Read more...]
Another Inflation Surprise
You know Your Survival Guy is not in the prediction business. I don't attempt to know the future but instead to prepare for it. But the market has no such limitations. Every month, new economic data are released, and the market reacts with glee or terror if the data are better or worse than expectations. Lately, the market has been regularly predicting lower inflation than the reported reality, and once again today, it has been surprised by inflation data. This time it was wholesale prices that were higher than expected. Jeff Cox reports at CNBC: Wholesale prices accelerated at a faster than … [Read more...]
SPENDING TSUNAMI: Revenue Is Not the Problem
At Reason, Eric Boehm explains that Joe Biden's budget makes even less sense considering the current economic environment of low unemployment and relatively decent growth. He writes: "The level of borrowing under the President's budget would be unprecedented outside a war or national emergency," notes the Committee for a Responsible Federal Budget, a nonprofit that advocates for lower deficits. Running annual budget deficits well in excess of $1 trillion makes even less sense when you consider the current economic environment. The unemployment rate in the United States has been under 4 … [Read more...]
Your Retirement Life: Traveling the Efficient Frontier
Are you familiar with the efficient frontier? More on this in a minute. First, let’s talk about risk. One of the more helpful exercises in understanding your own risk tolerance is imagining how you will react if your stock portfolio declines by 30% or so. You can do a historical review of how you reacted in times when markets took a beating. How did you feel? And how did you react? Where you are in your stage of life is crucial, too. If you’re soon to be retired or newly retired, this is most likely uncharted water for you in terms of stock investing and your emotions. When you no longer … [Read more...]
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