You, my fairly wealthy, highly successful reader, learned a long time ago how to harness a most powerful force: t-i-m-e. You saved ‘til it hurt and put money away with the faith that you might be in a better spot down the road. And now, when you look back on it all, you think, “No way I want to do that again. Not sure how I even did it. Can we change the subject?” Don’t worry, I won’t tell anyone. But saving ‘til it hurts does something magical. It puts the most powerful force into action. You put time on your side. You become a compounding machine, and without even knowing the miracle … [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 Let Your Money Turn to Dust in an Old 401(k)
If your money is collecting dust in an old 401(k), then consider doing an IRA rollover to Fidelity. It’s a non-taxable event, and you’ll be with my favored custodian. There’s a lot of money out there floating around. In The Wall Street Journal, Anne Tergesen reports that the number of 401(k) millionaires (those with at least $1 million in their 401(k)s) has increased by 25% this year. She writes: Some 378,000 retirement savers in Fidelity plans had seven-figure-plus balances as of June 30, up from 299,000 at the end of 2022. The number of IRA millionaires increased by a similar percentage … [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...]
The Worst Month for Housing Affordability This Century
Homebuyers are facing the worst conditions this century in regards to affordability. Lance Lambert reports in Fortune: On Monday, the average 30-year fixed mortgage rate reached 7.48%, marking the highest level since the year 2000. Even prior to this recent surge in mortgage rates, housing affordability, as monitored by the Atlanta Fed, had already deteriorated beyond the levels seen at the housing bubble’s peak in 2006. Once this latest mortgage rate surge is factored in, August 2023 will become the worst month for housing affordability this century. Your Survival Guy's take: If you’re in … [Read more...]
“Hey, Survival Guy, Why Are Bond Prices Down?”
UPDATE 8.22.23: With bond yields rising higher than they've been for some time, it's a good time to review duration. Bond duration is a measure of the change in price for a bond given a one percentage point change in interest rates. Every time interest rates rise, bond prices fall, and vice versa. Different bonds respond with greater or lesser volatility to changes in interest rates, and the magnitude of that change is measured by the bond's duration. Below is an update to the interest rate table I posted back in March 2022. Look how rates have changed. Investors in bonds today are actually … [Read more...]
Preparation and Experience Can Help, But at What Cost?
With everything that’s going on in the world today, Your Survival Guy is concerned about your safety. Stuff happens, and before you know it, you’re stuck in the fog. You know from here and here about my own experiences in fog. It happens fast. You deal with it. Because living life on the dock is no way to live. Preparation and experience can help. But at what cost? You know this market is foggy. You know our government is in debt up to its eyeballs. Remember the government bailout of GM, leaving common shareholders, the investing class, in ruins? The more government creep we have in the … [Read more...]
My Favorite Investment Tool, Real Estate, Water, Fog, and More
Happy Friday. Yes, you can sink your teeth into the short-term end of the yield curve, and there’s plenty of other opportunities along the way. Think of me as your guide. It can get foggy out there. Look at my favorite investment tool and the yields you can get today versus only three years ago. I can tell you investing is a lot like boating in the fog. If you have a plan and some experience navigating in it, then it doesn't need to keep you on the dock. If I stayed home every time there was some threat of fog, I’d miss a lot of good days on the water. The key is to become … [Read more...]
Shark Sighted in Block Island’s Old Harbor Basin
Your Survival Guy’s been to "the Block" many times. The Old Harbor basin is where the ferries come and go. Jack Perry reports the sighting in the Providence Journal, writing: A shark paid a rare visit to Block Island's Old Harbor basin over the holiday weekend. New Shoreham Harbormaster Kate McConville warned the public, saying in a Facebook post Monday, "We have had multiple reports of a shark sighting in and around the vicinity of the Old Harbor basin. Please use caution when around the water and report all sightings to the Department." McConville posted a photograph of the shark, … [Read more...]
Fixed Income Investors Happy for a “Return to Normal”
After long years of rates near zero, fixed-income investors are happy to see opportunities as rates on treasuries return to normal. Vivien Lou Chen reports in MarketWatch: Stock and bond markets reacted strongly to the minutes from the Federal Reserve’s July 25-26 meeting on Wednesday because of the signal being provided about policy makers’ views on long-run real interest rates, according to Colas. The minutes suggest the policy-setting Federal Open Market Committee “wants to see higher real yields across all maturities to slow growth and contain inflation,” he said. “All this will … [Read more...]
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