It’s Ok to Panic… But Don’t Do Anything

On Monday, the markets panicked, resulting in the Dow Jones having its biggest point drop in history and one of its biggest losses in percentage terms. Bond yields just about vanished while oil prices dropped by one-third. More than one commentator said that if you think you know what’s going on, you’re not paying attention. The elephant in the room is the rapidly spreading Coronaivurs, COVD 19. How widespread and how deadly it becomes are still huge unknowns. What we … Continue reading

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Nearly Everything I Know About Elections and Markets is Wrong

Many people have strong views about the impacts of presidential elections on the stock market and nearly all of these views are wrong. Like much else about the stock market, normal logic and common sense frequently do not apply. An analysis of elections over the last century and presidential terms over the last half century century shows surprising results. The analysis, by Dimensional Fund Advisors, showed that presidential election years — widely held to be strong market years — instead … Continue reading

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A Bad Week

You know it’s been a bad week for the stock market when: The market has rallied from down 1,000 on the day to down 600 and you feel relieved that it’s only down 600 points. But 600 points isn’t bad considering the Dow Jones Industrial Average is down 4,000 points on the week. That’s a record point total but more important, the percentage decline from the peak, about 14 percent in a little over a week, is close to a … Continue reading

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The Good Times Keep Rolling

For investors, they say, hope springs eternal and never more so than with the promise of a new year and new beginnings. As 2019 began, though, investors were worried mightily. While stock market returns for the year, as measured by the S&P 500, were only down 4 percent, the fall and winter was dreadful and investors were afraid. Those fear are now long forgotten after a powerful and steady rally that lifted the market by 31.49 percent, the 18th best … Continue reading

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Your Dog and Your Investments

Nearly everything about your investments and your dog is different, except for this: both are precious to you. Your dog needs attention and affection. Your investments do not. They work best in a quiet corner, getting little attention and given sufficient time to work their magic. A dog absolutely needs exercise. Your investments do not. The investments do best when they are not moved or stirred up. The longer they are not disturbed the better they are likely to do. … Continue reading

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There’s Never a Good Time to Get Gas

I never feel pumped to get a gas fill up for my car. I’m always in a hurry or tired or it’s unpleasantly cold or rainy outside. But I also don’t like it when the light goes on with the dire warning that I’m running on fumes. It’s also like this about personal financial planning. There’s never a good time to straighten up the mess of your financial affairs. It takes energy and gumption to deal with the reality and … Continue reading

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What You Keep

The easy thing to do when you are investing is to look at how much your portfolio is going up or down. But that’s not what’s really important. What’s important is how much of your investment portfolio, you get to keep and how much goes to Federal, state and local taxing authorities. For example, an IRA defers taxes until you take the money out. Under current law, once an investor turns 70 1/2, he has to start taking money out … Continue reading

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Under the Hood

All investors crave simplicity. That can come at a high cost. Many investors look at the title of the investment but don’t look under the hood. A prime example is target date funds. These investments are one of the fastest growing investment products in history. According to the Investment Company Institute, more than $1 trillion is invested in target date funds. A target date fund is is invested based on your retirement date. Essentially the only thing the investment manager … Continue reading

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Not Too Hot

Most investors worry about their portfolio performance when it’s dreadful. It’s also a good time to worry when performance has been very good. Why worry when performance has been a lot better than the overall stock market? Isn’t that a time to celebrate and not worry for a change? It may be that celebration is in order. It may be that you are a genius who’s picks have proven that you are superior to most of mankind. It may be … Continue reading

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Nothing to Fear

In the midst of the Great Depression, Franklin Roosevelt  addressed the fear that was paralyzing America. In his first inaugural address, Roosevelt said that “We have nothing to fear but fear itself.” There actually was a lot to fear. The economy was in terrible shape, people were dying and lives were ruined. But action was needed and fear got in the way of taking steps to improve people’s prospects. Often, in less dramatic ways, I find investors’ fears preventing them … Continue reading

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