A new-born niece came into my extended family recently. I got the task for looking into setting up a college education fund for her. I know about 529 plans. Every state has at least one plan. Some states have several plans. I quickly identified Ohio CollegeAdvantage 529 plan as the best plan for my niece. […]
Conventional Wisdom "Don’t Buy a Dividend" Is Wrong
I mentioned this last year in my post 3 Reminders About Year-End Mutual Fund Distributions. I see the conventional wisdom “don’t buy a distribution” is still going strong. Vanguard reiterated this conventional wisdom in its blog post The record date: Not a tune you can dance to in early December. But the conventional wisdom is […]
Money Is Fungible
Money can be moved from one purpose to another. It doesn’t remember where it came from.
It’s a Stock Picker’s Market
If you read or watch financial commentary, I’m sure you’ve encountered this piece of insight: “It’s a stock picker’s market.” I heard a guest say this in a recent episode of WealthTrack. Is it true? Absolutely. If someone picks the right stocks, they will have a better performance than the market. There’s no doubt about […]
What Makes Investing Hard?
I wrote a few weeks ago Investing Is Simple. “You come up with an asset allocation, open some accounts, pick a few index funds, and you are done. Once in a while you see if anything is out of whack and you redirect your new money to wherever is lagging. It’s not complicated at all.” […]
Sold PIMCO Foreign Bond Fund
I sold my entire position in PIMCO Foreign Bond Fund (Unhedged) Institutional (PFUIX). According to its prospectus, this fund invests in “… Fixed Income Instruments that are economically tied to foreign (non-U.S.) countries, … which may be represented by forwards or derivatives such as options, future contracts or swap agreements.” I bought this fund in […]
The Right Lessons and The Wrong Lessons
It’s the one year anniversary of the fall of Lehman Brothers. The media marked that event as the start date of the financial crisis. Several financial podcasts I listen to all ran features on “lessons from the financial crisis.” I’m more interested in the lessons at a personal level, not so much at the macroeconomic […]
Rebalancing in a Bear Market
The stock market crash in 2008 provides a good case study for rebalancing. If you are not familiar, rebalancing means selling some assets to buy other assets and putting your asset allocation back to what you originally wanted. Rebalancing is good for maintaining a portfolio because you are buying low and selling high. For 2008, […]
Which Broker? You Don’t Need One
When people start investing outside their 401k or 403b plan for the first time, their very first question is often "Which broker?" The answer should be "You don’t need one." Vanguard is a great choice for beginning investors (and seasoned investors!), but Vanguard is not a broker. It’s a mutual fund company. Vanguard has a […]
What Exactly Do You Do with Something That Could Be the Deal of a Lifetime?
Although it’s April Fool’s Day, this post is not a joke. My favorite mutual fund company Vanguard started a blog at vanguardblog.com. A team of five investment and communication professionals write for the blog. I have high hopes for it but I wish it were better. In one article, Forecasts and second marriages, Craig Stock […]
A Low Stock Price Is Neither Cheap Nor Less Valuable
I heard a comment on a New York Times Weekend Business podcast saying that a share of GM stock can’t buy a gallon of gas for a Chevy and a share of GE stock can’t buy two energy-efficient compact fluorescent bulbs (as of a week and half ago before the bounce back). While true, I […]
2008 Personal Rate of Return
Everybody knows 2008 was a bad year for investing. It may seem odd to some people that I never bothered to calculate my rate of return during the year. That information just isn’t so useful to me. I have no control over what the market does. Most of my investments are already in index funds […]