What is your most valuable asset? Your home? Not likely, even back in 2006. Your 401(k)? Doubtful, even when it was 2007. No, if you’re not yet glimpsing your retirement years, it’s likely that your biggest asset is you—and not just metaphorically. Let’s say you’re only 30, with a degree or two and some experience…
As more of the burden of generating income in retirement falls on the shoulders of retirees—and not the companies who signed their paychecks throughout their careers, in the form of corporate pensions—it’s become increasingly important for retirees to understand the role that Social Securitywill and will not play. Here are some points you may not be…
Years ago, a friend came home with a new, top-of-the-line road bike. My first thought: How can he afford that? It seemed like such a big purchase based on what I thought I knew. We lived in the same neighborhood, were close to the same age and both had young families. His life looked a…
The asset allocation process is somewhat like a Russian nesting doll. What appears as a sole, simple object actually comprises a great deal. Like each doll, one after the next, a portfolio consists of detailed, intricate workings. We’ve already seen this in earlier articles in our asset allocation series, where we covered some essentials, namely,…
We’re getting closer to the finish line in our series of articles concerning asset allocation. So far, we’ve covered how to analyze your ability, willingness and needto take risk — and what do when one or more of those factors conflict. Then we moved to the equity portion of your portfolio, starting with a discussion aboutdomestic vs. international stocks. Then…
Summary Socially responsible investing encompasses many personal beliefs, not just one set of values. Some investors don’t wish to invest in the “sin stocks” of companies whose products go against their morals. By avoiding the “sin stocks,” some investors may be accepting more risk than they realize because they’re not fully diversified across industries. Socially…
Summary While dividends may comprise a significant portion of total returns, they don’t add any explanatory power to future returns. Approximately 60 percent of U.S. stocks and 40 percent of international stocks don’t pay dividends. The total returns to investors come from capital gains. Corporate dividends can be replaced with self-made dividends. Seeking Alpha blogger…
What’s known as the carry trade is one of the more popular strategies of hedge funds, and it’s also becoming popular for investors seeking alternative fixed-income strategies that can provide higher yields in today’s environment of low rates. The strategy involves borrowing (going short) a currency with a relatively low interest rate and using the…
Dividend payments have been on a systematic decline since 1972, and the percentage of firms paying a dividend has declined from 63.8 percent in 1972 to 30.4 percent in 2011. The question is now, What does paying dividends tell us about possible returns? Even after controlling for firm characteristics, companies have become less likely to…
Common misconceptions Dividend-paying stocks may look awfully appealing, but you should be able to separate the truth from fiction before you jump into these investments. Here are seven common myths about dividend-paying stocks. Myth No. 1: Dividends hold up in bad markets. There is a perception that dividend-paying stocks will hold up better when the market…
I was recently speaking with a colleague in the advisory business. The conversation turned to greed. We both share a fascination with the CNBC programAmerican Greed. The program chronicles investment scams, with touching portrayals of victims. The scams have a common thread: the promise of huge returns with little risk. Often the returns are “guaranteed”…
Most of the market news you hear tends to be about stocks, but bonds are just as useful a tool for most investment portfolios. One type in particular, the municipal, or “muni” bond, remains very popular. These bonds are issued by local governments, they’re often tax-exempt and they can be relatively low risk. But muni…
Seth Allen, Dean of Admissions and Financial Aid, Pomona College, Claremont, Calif. College essays carry far more weight than they have in previous decades. With a record number of students applying for college, admissions offices have become highly selective when considering student applications. While each school has its own criteria, schools typically look for students…
When you were a child, did you ever play the board game Life? In the very beginning of the game, each player has a decision to make: Do they enroll in college, or head off into the work world? Heading into the work world meant making money right away, however, college meant student loans and…
March has truly gone mad as the inimitable Warren Buffett has teamed up with Quicken Loans to produce perhaps one of the most brilliant marketing boondoggles and at the same time one of the most bogus prize offers ever devised. And it will almost certainly work beautifully with no one to claim the reward. The…