Portfolio rebalancing is often described as looking at one’s portfolio at the end of the year, selling some winners and buying some losers, so the portfolio goes back to the intended asset allocation. I don’t do that. I don’t sell anything unless I’m trying to simplify my positions. I rebalance throughout the year with new cash. Because stock funds usually grow […]
Latest Blog Posts
What Type of Bank Is Your Bank?
No, it’s not a trick question. While most people think a bank is a bank is a bank, the financial institutions we usually call a “bank” actually come in many different flavors. Some are organized under federal laws, some under state laws. Some are a special kind called thrift, savings and loan or savings association. […]
Investments I Don’t Have
I wrote about my asset allocation in a previous post. This time I’m writing about what I don’t have. 1. No individual stocks, except unvested employer stock-based compensation. I believe picking stocks is a waste of time. I had tried picking stocks in the past. I spent a lot of time reading 10-Q/10-K reports, studying Wall Street sell-side […]
Subprime Induced Correction Is Over
It’s not official yet, but I suspect it will be shortly. The summer 2007 subprime induced stock market correction is over. The emerging markets index already went over its previous peak by about 4%. The S&P 500 and MSCI EAFE indexes are about 1% shy of their previous high. Given the daily volatility, the stock markets can easily reach new […]
Cascading Asset Allocation Method
Some readers asked me to write about my asset allocation and rebalancing thresholds. Here I introduce my Cascading Asset Allocation MethodTM (CAAM). I googled and I found no evidence of anybody else using that term. So I’m claiming a trade mark on it. 🙂 The Cascading Asset Allocation Method involves answering a series of questions. The questions […]
The Missing Name on Forbes 400 List
Forbes released its annual list of 400 richest Americans last week. There is one prominent name missing on the list. His name is John Bogle, founder of The Vanguard Group. Mr. Bogle started Vanguard in 1975. Vanguard created the first index fund for retail investors a year later. Today, Vanguard manages over $1 trillion assets. [Update in 2015: $3 […]
Research Life Insurance Company Ratings
This is the final post in my mini-series on life insurance. The previous posts in this series are: How To Buy Life Insurance Life Insurance: What To Buy Life Insurance: How Much Should You Buy? When you buy life insurance, you want to make sure the company will still be there when your beneficiaries need the payout. Otherwise […]
They Did It
The suspense is over. The Federal Open Market Committee lowered the target federal funds rate by 0.5%, from 5.25% to 4.75%. The Board of Governors also lowered the discount rate by another 0.5% from 5.75% to 5.25%. The discount rate was already lowered by 0.50% last month. The market wanted a 0.50% cut. The Fed obliged. The full FOMC […]
Life Insurance: How Much Should You Buy
I ended my previous post on life insurance with the question “How much should you buy?” I will address it in this post. First you have to figure out how much income you need to replace for your beneficiaries. You don’t have to replace 100% of your gross income because if you died, you would […]
Life Insurance: What to Buy
My last post about life insurance was on how to buy life insurance. This time I’m going to talk about what to buy. Permanent versus Term The best approach on the permanent aka cash value versus term discussion is tuning out. Just buy term. Very few people have a permanent need for life insurance. The vast […]