September 21, 2017

Investments

Investments are at the core of what we do, and here is some commentary on various aspects of the financial markets.

How Safe is Your Money Market?

How Safe is Your Money Market?

The Securities and Exchange Commission (SEC) changed the rules and required all financial institutions to move pricing their money market from a stable $1.00 price per shares to a floating net asset value.

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Gold’s Role In A Portfolio

Gold's Role In A Portfolio

Gold advocates will often go to great lengths to tout the advantages of owning gold.

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Investing Mistake: Paying Too Much In Investment Vehicle Fees

Investing Mistake: Paying Too Much In Investment Vehicle Fees

Even small extra fees could mean working an entire year longer!

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Invest Even When Afraid

Invest Even When Afraid

You can’t invest for the future in the future. Don’t let your fear of the future ruin your future.

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An Asset Allocation For Your Health Savings Account

An Asset Allocation For Your Health Savings Account

You are unlikely to need funds for any long-term care episode until about age 85. Given the long time horizon, we suggest investing your HSA for appreciation.

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Marotta’s 2017 TD Ameritrade Gone-Fishing Portfolio Calculator

Marotta's 2017 TD Ameritrade Gone-Fishing Portfolio Calculator

This portfolio uses all TD Ameritrade no-transaction fee exchange-traded funds with the exception of Vanguard Energy ETF (VDE).

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Mailbag: How Do I Replenish A Bond Laddering Strategy?

Mailbag: How Do I Replenish A Bond Laddering Strategy?

When you use a bond laddering strategy with funds, rebalancing to your asset allocation naturally buys and sells bond funds as appropriate.

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Asset Location Can Significantly Boost After-Tax Returns

Asset Location Can Significantly Boost After-Tax Returns

Exact asset location depends on the percentage of a portfolio held in each of the three types of accounts as well as the percentage of the portfolio which is to be allocated to each selected sector. But the boost in after-tax returns is well worth the effort.

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Five Things You Can Control: Goals-Based Asset Allocation

Five Things You Can Control: Goals-Based Asset Allocation

An advisor’s job is to recommend the optimum asset allocation regardless of how the client might answer a survey about risk tolerance.

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What Good Are Morningstar Stars?

What Good Are Morningstar Stars?

Do mutual funds with 5-star Morningstar ratings have better future returns?

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Are Democrats Or Republicans Better For The Stock Market?

Are Democrats Or Republicans Better For The Stock Market?

Politics matters less to our financial success than the ordinary decisions we face every day.

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Marotta’s 2017 Gone-Fishing Portfolios

Marotta’s 2017 Gone-Fishing Portfolios

A gone fishing portfolio is a portfolio of just a few stocks which should weather the ups and downs of the market fairly well while only rebalancing twice a year. Here are three hand-crafted gone-fishing portfolios for 2017.

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Marotta’s 2017 Gone-Fishing Portfolio Calculator

Marotta's 2017 Gone-Fishing Portfolio Calculator

A gone-fishing portfolio has a limited number of investments with a balanced asset allocation. This year I limited myself to 13 investment vehicles with two changes from 2016′s calculator.

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Marotta’s 2017 Vanguard Gone-Fishing Portfolio Calculator

Marotta's 2017 Vanguard Mutual Fund Gone-Fishing Portfolio Calculator

A gone-fishing portfolio has a limited number of investments with a balanced asset allocation. This portfolio uses all Vanguard mutual funds.

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Marotta’s 2017 Schwab Gone-Fishing Portfolio Calculator

Marotta's 2017 Schwab No-Transaction Fee Gone-Fishing Portfolio Calculator

A gone-fishing portfolio has a limited number of investments with a balanced asset allocation. This portfolio uses all Schwab no-transaction fee exchange traded funds.

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US Large-Cap Exchange-Traded Fund Choices

US Large-Cap Exchange-Traded Fund Choices

In anticipation of adjusting our yearly gone-fishing portfolios, I reviewed the performance of five US large-cap Exchange-Traded Funds (ETFs).

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Bond Investing In 2016

Bond Investing In 2016

Bonds had positive returns for the year despite returns peaking at the end of July and falling for the rest of the year.

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Resource Stock Investing in 2016

Resource Stock Investing in 2016

In 2016, Energy and Materials had some of the best returns of the year.

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To What Benchmark Should I Compare My 2016 Returns?

To What Benchmark Should I Compare My 2016 Returns?

Investors always want to compare the return of their portfolio against some benchmark index. We suggest not using the S&P 500 for that purpose.

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Freedom Investing and Emerging Markets in 2016

Freedom Investing and Emerging Markets in 2016

In 2016, the average return of the best investment products of the Freedom Six outperformed the Vanguard FTSE Developed Markets ETF by 6.75%.

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US Stock Investing in 2016

US Stock Investing in 2016

The S&P 500 had another good year, ending up 11.96%. The S&P 500, however, only represents half of the US Stock asset class, and Small- and Mid-Cap stocks performed even better.

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Mailbag: What Do You Think About The Elliott Wave Principle?

Mailbag: What Do You Think About The Elliott Wave Principle?

It is difficult in investing theory to determine which narratives have the appropriate underlying evidence to support them and which narratives are not worth following. Often it is necessary to be both a mathematician and a skeptic to filter out what is even worth considering.

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Benjamin Graham on Individual Stock Analysis

Benjamin Graham on Individual Stock Analysis

“I am no longer an advocate of elaborate techniques of security analysis in order to find superior value opportunities.”

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Using Factor Investing To Boost Country Specific Returns

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The rough idea is that the stock price of companies that are profitable are more likely to appreciate than companies which are not profitable.

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Investing Mistake: Confusing A Promising Company With A Good Investment

blueberries_t

A good narrative describes what happened in the past. And even though past earnings may have something to do with current share prices, they don’t have anything to do with future share prices.

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Factor Investing: Small and Value Factors

colored flowers

Factor investing “tweaks the idea of asset allocation and diversification by seeking out types of securities that have been shown, by decades of academic research, to offer positive return premiums over time.”

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Healthcare Stocks And Asking “Relative To What?”

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Why do our portfolios systematically overweight healthcare stocks?

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How The Markets Moved After A Trump Victory

bluegreenfractal

Beware of reading too much into three days of market movements.

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Mailbag: Which Investment Fund Should I Purchase To Minimize Fees?

stethoscope

On the surface it seems like option 3 (VHT) is the best deal. Is there anything I am missing?

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The Case for Investing in Energy Companies

oilrig

Energy’s low correlation with nearly every other major asset class means even very conservative investors should consider over-weighting Energy stocks.

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Investing In Hong Kong Has Lowered Risk and Boosted Returns

hong kong skyline

We allocate a portion of our managed portfolios to foreign stocks, and Hong Kong is the highest ranked country on the latest edition of the Index of Economic Freedom.

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Hedge Funds and Long/Short Strategies

Ostrich Race

Long/short strategies use the money from the stocks they have shorted to purchase extra stocks that they hope will go up.

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Are You Paying for Your Fund’s Advertising?

sparrow feeding

If you own some mutual funds, chances are you are paying a hefty marketing price.

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Why the Ending Value on your Performance Report Differs from your Statement

DogTeam

Here’s what you need to know to understand why the numbers may not match.

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Don’t Forget to Rebalance All Your Assets

stacked rocks

It can be easy to forget about your company’s 401(k) because you aren’t depositing the money yourself, your pre-tax contributions are deducted from your paycheck and are electronically deposited by your employer.

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What’s the Difference Between Time Weighted Return and Internal Rate of Return?

Abacus

There are 2 main types of returns you want to see on your performance report. What’s the difference?

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Economic Indicators: Gross Domestic Product (GDP)

basket of food

Under one theory, changes in GDP or the rate of GDP growth precede and could cause stock markets to react and move in response. This is usually not the case.

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What NOT to Compare on Performance Reports

Odd Couple Dogs

By definition and design, different types of reports produce different numbers.

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Beware of Dire Market Crash Predictions

questioning chick

I receive dire predictions with such frequency that were I to act on even a fraction of them I would never be invested in the markets.

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Where Should I Invest Money Which I Will Need in a Year or Two?

house money

Return comes with an element of risk. There is no safe investment which also pays a good rate of return.

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Why Would You Intentionally Realize Capital Gains?

handful of cherries

When you sell an investment that has appreciated, the IRS looks at your tax rate and taxes the gains accordingly.

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Selecting an Endowment’s Asset Allocation

Selecting an Endowment's Asset Allocation

Two rules of endowment investing: 1) Keep an equity bias and 2) diversify.

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The Golden Bear: The Bear Market of 1973

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This Bear market is considered one of the greatest challenges to retirement planning.

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Recouping Losses Is Not As Hard As You Think

Deceptive Posts About The Difficulty Of Recouping Losses

Many advisors and most investors don’t really understand the math on how to compute investment returns.

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Radio: The Importance of Real Estate

rainbow row

David John Marotta was interviewed on radio’s Schilling Show discussing real estate and its importance in your total net worth.

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Changing Your Financial Behavior Is Difficult

Financial Behavior Modification Is A Difficult Process

Our minds are wired to quickly generalize on perceived trends and react to them.

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Double Bottom Bear: The Bear Market of 1970

Double Bottom Bear: The Bear Market of 1970

Bear Markets are unpredictable, but there is no reason that they should be a cause of distress.

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5 Reasons to Have Some Cash Equivalents

5 Reasons to Have Some Cash Equivalents

There are at least five reasons to hold cash. Without a good reason to hold cash, you may be holding too much.

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BREXIT: Britain’s Independence Day

BREXIT: Britain's Independence Day

The future may be uncertain, but the markets are quite reliable in the long run.

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Narrowly Framed Questions Fail to Meet Life Goals

Narrowly Framed Questions Fail to Meet Life Goals

Purchasing investment products in isolation from the larger context of your specific situation is like pushing random buttons on a vending machine in order to provide a Thanksgiving dinner for your family.

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