PIMCO’s founder and star manager Bill Gross called the bonds bubble too soon. He got a lot of flak for getting out of Treasuries before Treasuries had a good run. Many people point to this as a case-in-point for the failure of active management. He had to issue a mea culpa saying he was wrong. […]
Latest Blog Posts
Student Loan vs Mortgage
News came that outstanding student loans will top $1 trillion this year. The Obama administration recently announced some tinkering on the edges to help lower the interest on student loans. Some say student loans have become a burden that could place a drag on the economy. How did student loans become such a large problem? […]
Don’t Save Money on Groceries With Coupons
Do I need to tell you coupons are hot? Groupon is often in the news. You hear about how many billions it’s worth, its anticipated IPO and its controversial accounting metric ACSOI (now dropped). Of the top 10 personal finance blogs compiled by Wisebread, at least 6 are in the coupon and bargain shopping category, […]
Pre-Tax Spending Accounts Are No Cure for Tax Increases
New York Times Your Money columnist Ron Lieber got into some hot waters with readers after he wrote his column A Tax Plan That Might Not Be So Painful. I guess that’s because he used Dodging the Proposed 2013 Tax Increase as the headline for his blog post. I feel really sorry for him. Ron […]
Irrational Sensitivity to Service Price Increases
I wrote about people’s irrational sensitivity to gas prices some time ago. This time I’m writing about people’s irrational sensitivity to service price increases. In each case, we are not talking about a lot of money. There are values behind each service. Still, people complain vehemently about the price increases. Debit Card Fees News came […]
Market Timing: Transaction Costs and Taxes
I continue to look for criticisms of market timing and see how the market timing proponents would answer them. Last time I looked at some criticisms from Vanguard founder John Bogle. I think those criticisms were answered reasonably well. Another major area of criticisms centers around frequent trading, transaction costs and taxes. Critics say market […]
Why Buying On the Dips Is Still All It’s Cracked Up to Be
Wall Street Journal columnist Jason Zweig wrote a puzzling article Why Buying on the Dips Isn’t All It’s Cracked Up to Be. The gist of it is that buying on the dips doesn’t work. I find the article puzzling because it has a weird definition for buying on the dips. It defines a dip as […]
Market Timing: Criticisms From John Bogle
In the previous post Market Timing vs Conservative Portfolio I explored a possible valid reason for market timing. Proponents say that market timing isn’t so much for enhancing returns but for reducing risks. Although market timing underperforms the market, an investor with low risk tolerance would invest in a conservative portfolio anyway, which also underperforms […]
Market Timing vs Conservative Portfolio
After listening to Paul Merriman’s Sound Investing podcast, I found out that Paul Merriman does both indexing and market timing. He said of the $1.5 billion his company manages for clients, about 15% are invested in market timing strategies. That’s quite peculiar. Usually people who follow indexing believe in market efficiency, which says it’s unlikely […]
Save Aggressively, Invest Conservatively
Now we know the story that retail investors run for the hills whenever the stock market hits turbulence is largely a myth. Even during the serious financial crisis in 2008-2009, only 7% of the money invested in stock mutual funds were sold out of those mutual funds. However, even though most investors don’t sell, they […]