Portfolio Solutions Blog
What are you doing in this market environment? I’ve been asked this question thousands of times, in all market environments. It’s a difficult question because it’s natural to want to do something useful today in preparation for what is to come tomorrow. But today’s market environment may not be tomorrow’s, and if we don’t know what tomorrow’s market environment will be, then how do we do something useful today? It can be maddening.
There may be something useful you can do. But first, let’s talk about...Read More »
What’s the fastest way for younger people to grow their wealth? The answer is to make saving a habit. A solid savings plan that puts away 10 percent of income or more is the most reliable method for growing wealth at an early age. Learning to invest well is also important, but it’s not nearly as important as sticking to a regimented savings plan.
Parents and grandparents encourage children to start saving at an early age. We buy them cute piggy-banks and tell them to put money in it for a rainy day. When our children grow into young adults and start working full time, we tell them...Read More »
You’ve learned to discount high-cost, actively-managed funds, ignore Wall Street brokers, and see the pitfalls of model ETF portfolios that use tactical asset allocation and charge high fees. You’ve seen the light and clearly understand why a low-cost index fund portfolio has the best chance to achieve your investment goal. Now you want to help others find their way out of the darkness.
Unfortunately, spreading this wisdom is harder than you thought. It’s not that your friends don’t want to understand, it’s that they can’t relate to the obscure concept of index investing. So, here’s...Read More »
Mutual fund rating services divide mutual funds into categories based on their investment style. This helps investors compare the performance of one style to another and helps them compare the performance of individual funds in a particular style. While useful in many ways, this methodology can also create the illusion of superior performance when none exists.
Among the most familiar investment style tools is the Morningstar Style Box, a nine-square grid that...Read More »
I love you man, but you’re wrong!
Legendary Fidelity Magellan fund manager Peter Lynch wrote "buy what you know" in his classic book, One Up on Wall Street: How to Use What You Already Know to Make Money in the Market. The basic principle is simple: you're more likely to be successful in the market if you buy what you're familiar with. Peter Lynch was wrong; or at least he wasn’t quite right.
Warren Buffett once commented that had you been at Kitty Hawk in 1903 and marveled at the...Read More »
For as long as I have followed Vanguard Group founder and former CEO John Bogle, he has never embraced investing in foreign stocks. “I wouldn’t invest outside the U.S.” he said during an interview with Carla Fried for Bloomberg Business. “If someone wants to invest 20 percent or less of their portfolio outside the U.S., that’s fine. I wouldn’t do it, but if you want to,...Read More »
The Big Apple is the famous nickname for New York City. It was made popular in the 1920s by John J. Fitz Gerald, a writer for the Morning Telegraph. The name was also popular with jazz musicians in the 1930s and ‘40s who coveted gigs in posh Manhattan nightclubs.
Most people still associate The Big Apple with NYC, but there may be a challenger. The challenger is Apple, Inc. (ticker: AAPL).
Apple is the most valuable corporation in...Read More »