In The Wall Street Journal, John Greenwood and Steve H. Hanke, both economists at Johns Hopkins, discuss the similarities of today's markets to that of 1987, and October 19 of that year, which is known as "Black Monday." They write: This brings us to the stock-market crash of 1987. In that year the key 10-year bond yield rose steeply from January onward (from 7% in January to 10% by Black Monday in October) and the money supply slowed sharply. In 1987 growth of M2 declined by almost half, from 9.7% year-on-year in January to 4.9% in September, while M3—no longer published by the Fed—slowed … [Read more...]
Part II: When Others Resent You for Your Success
You appreciate what you have, where you’re at in life (maybe a little more money wouldn’t hurt), and where you’re going. You saved ‘til it hurt, and you know you definitely don’t want to have to do that again. You worked hard at your job, your business, and you put in the time. It went by fast, but a lot of those days were long. Now, you need to keep what you’ve made. A different skill set is needed. What are you going to do? First, I want you to avoid the mistakes that keep investors from realizing the success they deserve. Mr. Market has a way of wanting to change people’s lives, and not … [Read more...]
Life: When Others Resent You for Your Success
Let’s not beat around the bush. I’m Your Survival Guy, not Your Get Rich Quick Guy. I’m interested in helping the highly successful, fairly wealthy among you get through tough times with the peace of mind you deserve. My focus is mostly on navigating Your Retirement Life, the times when you want to enjoy your life’s work; living off your savings, not draining the bank, and doing what you have always wanted to do. Ahhh, the savings. I can’t do that part for you. That’s the heavy lifting that’s up to you. The showing up every day and getting the job done. Because the act of saving is just … [Read more...]
Should You Invest in Municipal Bonds?
Your Survival Guy’s not a big fan of municipal bonds. States with the highest taxes and the highest debt don’t seem like great investment partners to me. And with the social antipathy towards the investing class, who’s to say these states won’t change their promises? If you are undeterred by the idea of partnering with some of the least effective governments in America, Oyin Adedoyin explains the basics of municipal bond buying in The Wall Street Journal, writing: Want to get a tax-free return on your money? Put sewers and subway systems in your portfolio. The municipal bonds that state … [Read more...]
Investing Habits of the Fairly Wealthy: #7 “C-“
A lesson in investing: It’s a lot like high school. There’s ups and downs. It can be an emotional roller coaster. But if you own your bonds and stocks outright and hang in there, then there’s a graduation date—your bonds mature, you collect dividends, and you move on to the next step in life. As if it were that easy. It’s not easy. One spring Friday afternoon of my high school freshman year, Your Survival Guy got off the bus looking forward to the weekend only to find my dad at his desk looking over my report card. “What’s going on at school?” he asked. “Not much,” I said. “I … [Read more...]
“The Hard Thing About Getting Older Is Everything…”
You know, investing is a lot like high school, especially when it comes to bonds. When you buy a bond, for example, you’re making an investment at a specific point in time with a set graduation date. If you hang in there, have patience, and don’t get kicked out, you graduate. But nothing’s guaranteed. Your Survival Guy’s a big believer in the tough love of compounding experiences. Doing the work. Gaining knowledge. Learning the hard way, sometimes, having a little luck by just showing up. And somehow getting by. That’s a lot of what high school and bond investing are both … [Read more...]
It’s More Important than Ever to Save Til It Hurts
According to the most recent reading of the Mercer CFA Institute Global Pension Index, the United States has come in at 22nd place among 47 countries in terms of retirement security. The big problem? The long-term solvency of Social Security. Oyin Adedoyin reports for The Wall Street Journal, writing: In a new ranking of the world’s retirement systems, the U.S. scored a C+, falling further behind the Netherlands, Australia and Sweden. The U.S. came in 22nd out of 47 countries, according to the latest Mercer CFA Institute Global Pension Index, released Tuesday, with a slightly lower score … [Read more...]
“Yields You Can Sink Your Teeth Into Dancing…”
Your Survival Guy isn’t looking to turn over your apple cart. But with today’s yields, it would be a shame to miss the boat. Sometimes, the grass is greener. Let me explain. Imagine you’re getting ready for a weekend. Your family is coming to visit. It’s peaceful outside. You have a few things to finish up, but all in all, you’re in good shape. Then it hits you. Like a solar storm without warning, you see it. The Friday email from Your Survival Guy. “Don’t open it,” you say to yourself. Too late. At dinner, you can’t stop thinking about it. Why did you open it? You didn’t want “yields … [Read more...]
Dirty Jobs: Essential Work, College, and the Skills Gap
In an uncertain world, essential jobs have never been more necessary. In an excellent interview, Reason magazine asks former Dirty Jobs host Mike Rowe about how society has made "work the enemy." Here's a short quote from the interview: Mike Rowe is best known for his stint hosting the Discovery Channel's longrunning Dirty Jobs, where he performed the sort of work we all rely on but don't want to think about too much, from cleaning septic tanks to putting hot tar on roofs to disposing of medical waste. Rowe frequently talks about the value of the hard work that's too often dismissed by a … [Read more...]
Investing in Bonds Is a Lot Like High School
One of the virtues of constructing a bond ladder, where you own the bonds outright, is that you’re not confined to a mutual fund and/or ETF where the emotions of the group can rule the roost. When you invest with groups, you become a groupie. If they panic and sell, that forces the fund manager to sell what you might feel are good positions simply to raise cash for those exiting the building. You don’t have a choice in the matter. When it comes to bond ladders, you also have direct control over timing. In other words, as bonds come due, you can decide whether it’s time to change course … [Read more...]
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