In my conversation with you this week, we talked about the appropriate draw rate from your portfolio. We discussed how the days of a four percent draw are history. With interest rates nailed to the floor, you need to adjust accordingly. Thankfully, most of you have, I hope. Take a look at Dick Young’s investment North Star. That, in a nutshell, is how savers are penalized by Washington. Now, look at the dividend yield on the Dow Jones Industrial Average. Do the math. A simple back of the napkin calculation of a 50/50 portfolio yields a fraction of what it used to. These are not easy … [Read more...]
You Invest, They Win
The founder of the largest hedge fund in the universe, Ray Dalio, tweeted this from Burning Man:
Just back from Burning Man. Reminds me of Woodstock with better art (installations) and less good music. What a great vibe and what amazing creativity!
Photo is with my pal and coworker Jeff Taylor at his great music camp Root Society. If you go next year, 1-5am is best.
Are these the guys you want running your money? You invest, they win. But hey, it’s not about the money. It’s about saving the planet man.
Because if it’s about the money (Dalio has a personal net worth of $19 billion) then this hedge fund lost to a boring Vanguard fund that uses a conventional mix of 60% stocks and 40% bonds.
The article doesn’t come out and name the fund, but perhaps you, as a long-time reader of our websites, know the name: Vanguard Wellington.
You might also know what Vanguard founder, the late, great, Jack Bogle, meant when he said: “The grim irony of investing is that we investors as a group not only don’t get what we pay for, we get precisely what we don’t pay for.”
The captains of the investing universe are living their “best life” at whose expense?
Yours, of course. You invest, they win. Read more below.
In my conversations with you, you’re telling me home prices are crazy. It really doesn’t matter where you live. Take, for example, a realtor and prospective client I was talking with yesterday. He operates in the mountain west and said he has tons of buyers, just no homes to sell. No supply. And that’s residential real estate today in a nutshell—supply. On a recent trip to Key West, we talked with a realtor getting ready to show a house as we were walking by. Curious, we asked if we could take a quick look. This tastefully done home was a perfect, cozy, old town Key West conch retreat. The … [Read more...]
Sometimes it’s hard to talk politics. So let’s talk about religion. Because when it comes to kneeling down in front of the stock altar, IBM has got some religion. I’m talking about DIVIDEND RELIGION—paying one since 1916. Can I get an AMEN! Look at the chart for my Survival Guy Stock above and consider life back in 1986 for a moment. Tom Cruise was lighting it up on the big screen with Top Gun. IBM? Not so much. (Talk about needing to put out a fire.) But it still paid a dividend that year. Sometimes setting it and forgetting it works wonders. What were you doing in 1986? Me? I was … [Read more...]
You’re telling me what friends are asking you the most. But first, let’s take a step back. You’ve been through a lot over the last year. Most of you stuck with me as we watched the world turn upside down. We lived to fight another day. Hey, I’m Your Survival Guy, not your "hope we make it" guy; what did you expect? You didn’t think I’d leave you behind, did you? You didn’t panic (maybe a little), you didn’t drop to your knees and raise your hands to the sky in despair (it’s OK, no one saw that), and you stuck to your plan (too scary not too). You made it through in your own way in one of the … [Read more...]
You probably have dozens of apps on your smartphone. Chances are they are collecting your personal information en masse, and either selling it to third parties or keeping it for themselves. Most likely both. You have read here about the widening surveillance state I'm calling the virtual panopticon. The efforts by the government to surveil Americans are expanding quickly as technologies make it easy to watch every part of your life. But how much surveillance are you inviting right into your home? Apps on your phone are collecting massive amounts of information about you every day. Some … [Read more...]
For years Democrats have been trying to push through a bailout of insolvent union pension funds. They finally found a way to push it through. Part of the COVID-19 relief bill is a bailout of more than one hundred union pension funds. Many of these union funds have been managed more like pyramid schemes than like proper pensions. Rather than putting enough money aside for each employee to fund his or her pension, the fund relied on a steady stream of new employees putting money in the fund to pay retirees. That didn't work out when fewer truck drivers, ironworkers, and warehouse workers … [Read more...]
You may have made many investment decisions in your life, but did you ever invest in a company to prevent climate change or to achieve social justice? That's what ESG (environmental, social, and governance-oriented) funds want you to do. In fact, there are activist shareholders who attempt to force corporate boards to include ESG goals in their missions. The SEC under the Trump administration gave some level of cover to corporate boards focused on performing their fiduciary duties to shareholders. The Biden administration may do the exact opposite, emboldening activist shareholders who want … [Read more...]
In Deep Survival, Who Lives, Who Dies, and Why, author Laurence Gonzales explains, “The events that we call ‘accidents’ do not just happen. There is not some vector of pain that causes them. People have to assemble the systems that make them happen. Even then, nothing may happen for a long time.” In 1960, when MIT meteorologist Edward Lorenz was modeling weather systems, he discovered a tiny change in the initial state (1 part in 1,000), explains Gonzales, was enough to produce totally different weather patterns. It became known as the Butterfly Effect, “the notion that a butterfly stirring … [Read more...]
You’re living in a crazy world where a lot of the frustration you and I feel is absolutely avoidable. Where’s leadership’s common sense? They’re making calls that impact your life in a way that seems separate from theirs. Why, for example, is the nation’s Capitol building surrounded by a moat-like steel fence and armored guards? From whom are they protecting themselves? You’re witnessing reckless spending and the destruction of the dollar. Is there any wonder today’s headlines read like an inflationary who’s who? “Lumber Prices Notch Records on Remodeling Boom, Stock Futures Gain, Natural Gas … [Read more...]
Happy Friday, it’s almost five o’clock. Hang in there. This week we have a lot to talk about, but first, I have to say time flies. With my daughter in college and a son almost there, I feel a little older. A client friend told me about a conversation he had on a milestone birthday. “Dad, I can’t believe I’m 65,” he said. “How do you think I feel?” His dad responded, “I have a son on social security.” Aren’t we always in our mid-thirties mentally? Time flies. (If you want it to slow down, try not drinking for a month, go on a diet, or go jogging.) When I was fresh out of Babson … [Read more...]