Recently, I have seen the graphic below floating around and heard various comments about how dire the situation is and wanted to provide one quick rebuttal (for lack of a better word). But first, let me show you the apocalypse du jour graphic. This chart shows the National Debt growing from less than $1 trillion in 1971 up to our current debt of approximately $23 trillion. Alarming, right? Maybe. That’s… Read More
Why Study Market History?
While I am personally not an advocate of active investing, I follow the writing of many active managers. There are a few who have both a wonderful way with the written word and a track record to boot. Bill Miller of Miller Value Partners is one of them. I wanted to both make you aware of his work and point out a few insightful excerpts from his most recent 2Q… Read More
Where do we go from here?
I have said before that the primary goal of successful retirement income investing isn’t growth OR income, but growth OF income. For people who are nearing retirement today, as we look over the horizon toward the thirty years that lie ahead, we must ask the question: Is it time to rethink the conventional wisdom of decades past? Historically, the popular answer for providing retirement income (though not necessarily the correct… Read More
Perceived Safety of Bonds
Imagine standing in the middle of a field as a thunderstorm starts to roll through. About 50 yards away is a tall solitary tree. As someone who grew up in farming country, we grew up knowing that standing underneath the tree is the absolute worst thing we could do, even if it feels safer. The smart thing to do is to make yourself as small as possible by laying down… Read More
The Stock Market and Predictions
Predictably unpredictable and unpredictably predictable. This is the market in a nutshell. The markets are predictably unpredictable because the market has a way of surprising the greatest number of people. Few people (nobody) saw the market returning 29% in 2019. I realize that’s a distant memory now, but it was still surprising, to say the least. Just as surely, nobody saw an economic shutdown caused by a global pandemic that… Read More
Market Expectations for the Next 30 Years
As usual, there are many different scenarios being discussed at the moment. The COVID second wave, economic struggles, interest rate projections, more fiscal stimulus, corporate bankruptcies, and on and on we go. This is applicable to the world of traders, not investors. Investors don’t invest to make a quick buck. Long-term investors - which is a redundant term - invest because it is a prudent choice to expand capital over… Read More
The Fixed Income Conundrum
Here’s where we are today: As I write this, the 10-year Treasury yield stands at about 0.94% and the 30-year Treasury stands at 1.65%. This creates a bit of a conundrum for fixed income investors. Let me explain. The Federal Reserve Board has a long-standing policy they have stated through the years of a target inflation rate of 2%. Whether or not they accomplish this goal, here is what they… Read More
Preparing For “What-Ifs”
We are now a little more than two months out from the bear market lows. As the swift recovery ensued, I started hearing stories of investors who sold out of their portfolios around DJIA 19,000 “because the market was going lower.” They were right for the blink of an eye. With the market now back above 26,000, when are those investors supposed to get back in? I have to pose… Read More
Equities in Retirement: A 30-Year Case Study
Whenever I ask soon-to-be retirees what the ultimate goal of investing in retirement is, the most common answer I hear is: I don’t want to run out of money. Pretty straightforward, right? Here’s the problem. When I ask many of those same individuals what the primary objective of their retirement portfolio is, this is the typical response: Preservation of principal. Whether retirees realize this or not, those two goals run… Read More
The Next 20% Move
As if the news cycle wasn’t already stuck in short-term repeat, our lives have entered into a morose version of Groundhog Day and we have no idea when it will end. On Twitter, somebody posted it’s March 76th because that’s what it feels like. Spring is here and instead of barbeques with neighbors, we’re locked in our houses. When each day seems like the last, it’s easy to get stuck… Read More
