Articles

Your 401K Choices Are Important

Many times over the years I’ve looked at outside 401k plans for clients and others who have requested this. Often, they know these choices are important but they may not have a clue about how to make the choices or who to turn to. In bigger companies, human resources professional offer advice about how to sign up or withdraw money but may not know much about how to pick investments either. The decision point often is when an employee is … Continue reading

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It All Depends

Often when someone asks me a financial question, the answer is “it all depends.” It’s  not a cop out. The considerations frequently are more complicated than the questioner realizes and individual circumstances or unknowable future developments may determine the answer. Sometimes, the right answer is just a matter of personal preference. Most Americans don’t save enough for retirement. But the more diligent ones read this in financial publications and overdo it. I’ve told some young people in their 20s and … Continue reading

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You Know You’re in a Bear Market When…..

You know you’re in a bear market when you are grateful that the Dow Jones Industrial Average is only down 300 points. You were afraid it would be down 600 or 1,000 points so 300 doesn’t seem that bad. You are grateful that one or two days a week, like clockwork, the stock market gives you a break and goes up. Another sign of a bear market is when the pundits who are predicting the end of civilized society as … Continue reading

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A Reasonable Request?

Last week a client told me that he believed a recession was imminent and he wanted to take investment actions capitalizing on that view. At first blush, this seems to be a reasonable request. Many commentators foresee a recession as the result of the Federal Reserve’s aggressive interest rate tightening cycle. However, this view reflects several beliefs about investing that are simply not true. One of the main suppositions is that the stock market acts in line with what is … Continue reading

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Babe Ruth and Financial Planning

Babe Ruth was born into a poor family in Baltimore and died young as a wealthy man and the hero of the golden age of sports. Although he didn’t look like a heroic athletic and roamed well outside of fair territory, he broke ground in athletic and business achievement. He had good coaching and support in both arenas and knew which rules to break (most) and when to listen to his coaches and he had some of the best. Ruth’s … Continue reading

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Bobby Bonilla Day, Anna Scheiber and the Miracle of Compound Interest

Every July 1, the New York Mets mail out a check for $1.2 million to former outfielder Bobby Bonilla This will continue until 2035 even though he last played baseball in 2001. Anna Scheiber died in 1995 at age 101 and left a fortune in excess of $22 million even though she never earned a salary of more than $4,000 and had a pension of $3,100 a year. Both stories dramatize the miracle of compound interest.With both we are talking … Continue reading

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The Era of Magical Thinking

In recent years we have been conditioned to believe that anything is possible. Indeed, miracles have happened. The Internet, cell phones, social media, networked computers, online shopping have changed the world beyond recognition. These advances have changed so much and become so ubiquitous that we take them for granted. But perhaps because of these big changes, we expect miracles everywhere. Cheaper, faster, easier is the rallying cry of technology and much of the time it delivers. But not always. Usually … Continue reading

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Can the Market Survive Speculative Fervor?

For months, the global markets have been rife with speculative excesses. Normally, this would be a worrisome development for any serious investor. Often, speculation dooms bull markets. But so many factors auger well for the markets that it’s hard to call the end of this bull. So far, instead of the bell tolling for the bull, we have seen a rotation away from many – but far from all –of the areas where speculation seemed extreme. At the same time, … Continue reading

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Know-It-Alls

Beginning investors think they know more than they do. Experienced professionals accept uncertainty and are secure in the knowledge that they cannot predict the future. It is not a harmless affectation to think that you can know the future. It is one of the costliest mistakes an investor can make. Only luck can save an investor who is overly confident in his foresight. Often, investors spot a trend and think they can make money at it. They think they alone, … Continue reading

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The Law of the Jungle

The way humans have evolved over millions of years is spectacularly unsuited for investing (Think Ramapithecus and similar forebears). The events and the results of the last year demonstrate that as well as anything could. In most environments, survival is based on quickly recognizing threats and reacting. In the stock market, the best results come from putting some thought into investments ahead of time and then ignoring threats and being patient. In mid-March last year, in the early stages of … Continue reading

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