Transparency

Our American system of capitalism isn’t perfect, but the competition it creates encourages innovation, inventions and drives solutions to economic and social problems. The dark side of capitalism creates Bernie Madoff, Enron and others who use the system to their advantage.  Capitalism requires a level of skepticism on the part of consumers to keep from being taken, and at the very least, an understanding that not everyone or everything is operating on the level you think they are. Flash Boys, Michael Lewis’s book about high frequency traders, provides a great illustration.  The conduct of… [read more]
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Time to Make a Difference

“How you spend your money is how you vote on what exists in the world.” – Vicki Robin If I asked you what you can do to make things better at a global level, what would you say?  A few obvious things come to mind: vote, protest, donate, serve, volunteer.  I would venture to say most of us do some of these things but are still left with a desire to do more.  As we watch our leaders struggle to get things done, we wonder how we can make a difference.  It was this feeling… [read more]
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When Boring is a Good Thing

Our American society celebrates, appreciates and rewards the bold and visibly successful. President Trump rose from real estate developer’s son to reality television star to President, in no small part due to his outspoken personality and flamboyant lifestyle that flies in the face of the boring politician stereotype.  Richard Branson, founder of Virgin Atlantic airlines, and Mark Cuban, investor and owner of the Dallas Mavericks, are frequently in the news because the media knows their exuberant personalities and visible wealth appeal to many people. We don’t like settling for average, another word for… [read more]
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Investment Shock Absorbers

(from Dimensional Fund Advisors’ Outside the Flags blog by Jim Parker dated February 2017. Jim is a Vice President with DFA, leading the communications and marketing team in the firms’ Australian office.)    Ever ridden in a car with worn-out shock absorbers? Every bump is jarring, every corner stomach-churning, and every red light an excuse to assume the brace position. Owning an undiversified portfolio can trigger similar reactions. In a motor vehicle, the suspension system keeps the tires in contact with the road and provides a smooth ride for passengers by offsetting the forces of gravity,… [read more]
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An Incredible Stat About the Dow Shows Just How Strangely Stocks Are Trading

(from Alex Rosenberg’s CNBC article which appeared on Yahoo! Finance on March 16, 2017.  Click here for the original post.  Alex is a producer for CNBC, where he serves as the digital writer & editor for “Trading Nation,” “Futures Now,” and “Options Action.”  Learn more about Alex here or follow him on Twitter here.) Eighteen years ago, when the Dow Jones industrial average (Dow Jones Global Indexes: .DJI) was trading at half its current level, 100-point daily moves were twice as significant. That’s just math. What’s surprising is that they happened much… [read more]
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What Are You Paying?

When we purchased our first home, I was stunned to see all the estimated costs on our closing statement: loan origination fees, appraisal fees, credit report fees, flood certification fees, recording fees, and more.  While I was overwhelmed by the number of miscellaneous costs, they were clearly spelled out, and I knew what we were paying. For investors, it’s not always that easy. New York Times columnist, Ron Lieber, recently wrote about the difficulty getting to the bottom of what you’re paying as an investor.  In his recent Your Money column, The 21 Questions [read more]
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A Vote For Small Cap Stocks

(from Dimensional Fund Advisors’ Down to the Wire blog by Weston Wellington dated 12/22/2016. Weston is a Vice President with DFA, helping to lead the firm’s market research.  He works closely with financial advisors all over the world in helping them to understand DFA’s approach to investment success.)    In the days immediately following the recent US presidential election, US small company stocks experienced higher returns than US large company stocks. This example helps illustrate how the dimensions of expected returns can appear quickly, unpredictably, and with large magnitude. Average returns for US small company stocks… [read more]
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Bonds Away!

Why would I ever want to hold bonds in my portfolio? I’ve been asked that question many times over the last 28 years.  Between June 2004 to December 2005, when the Federal Reserve raised the target rate 13 times in a row, resulting in lower bond prices.  From 1995 to 1999 and 2003 to 2006, when bonds appeared to serve no purpose in portfolios than to dampen the double-digit returns stocks delivered.  More times than not, bonds have been the underdog in investment allocations, and recent stock market returns followed by the Fed’s rate… [read more]
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Beware the Prognosticators

While pondering topics this week for my final post of 2016, I’ve been inundated with periodicals, industry publications and online headlines full of projections about hot stocks, interest rates and where the overall market is headed in 2017. I started linking stories above to make my point, but there are so many, it’s tough to choose just a few.  Linking to one headline suggesting that the Dow is heading to 40,000 would show preference over a claim that it’s headed to 2,000.  If you’re curious, search virtually any financial media site after you’re finished reading.… [read more]
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