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...]
“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...]
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...]
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...]
They’ll Tell You Inflation is “Under Control”
When you hear that inflation is under control, all you need to do is sink your teeth into Your Survival Guy’s food inflation chart to get the real story. You and I know that government knows no limits when it comes to spending your money. It will create dollars out of thin air because it can, and expect you to absorb the devaluation of your own hard earned currency. You and I don’t have the luxury of a printing press in the basement, and we need to live our lives with fiscal responsibility. There’s a word worth repeating. Responsibility. It is up to you to take control of your … [Read more...]
Once Again, the Market Is Surprised by Price Inflation
For the second month in a row, inflation came in above the market's estimates. Bloomberg's Augusta Saraiva reports: Underlying US inflation topped forecasts for a second month in February as prices jumped for used cars, air travel and clothes, reinforcing the Federal Reserve’s cautious approach to cutting interest rates. The so-called core consumer price index, which excludes food and energy costs, increased 0.4% from January, according to government data out Tuesday. From a year ago, it advanced 3.8%. Economists see the core gauge as a better indicator of underlying inflation than … [Read more...]
Managing Your 401(k) Can Feel Like Time Standing Still
When Your Survival Guy graduated from Babson College in 1994, I got right to work. Right to work traveling, that is. I hit the road that summer, backpacking through Europe beginning with a trip to a Greek isle to visit a fraternity brother at his family’s summer place. That went so well that when I got home, I decided to be a ski instructor for the winter. Then, finally, I made my parents proud, and I got a “real” job at Fidelity Investments. That was March ’95. What’s the rush? One of my tasks at Fidelity Investments was to jump on the phones when call volume was high. The other part of my … [Read more...]
“My Effin’ Life,” by Geddy Lee of the Band Rush
Your Survival Guy’s been reading “My Effin’ Life,” by Geddy Lee of the band Rush. To understand Lee, one needs to know where he came from: the suburbs of Toronto, Canada, a child of holocaust surviving parents. His father died when Lee was only 12, and as such, Lee knew about loss at a young age. His mother, grief-stricken, made it hard for Lee to realize his own pain from the loss of his dad. When Lee looks back, writing “My Effin’ Life” at age 69, he realizes he, too, was a survivor and not just a quiet kid. He was determined. He had calloused fingers from playing, he was hardened … [Read more...]
- 1
- 2
- 3
- …
- 93
- Next Page »