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  • Running Fire Drills On Your Portfolio

    April 29, 2015

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    Jon

    Best PlanRemember back to when you were in school. Mixed within the classes, lunch, and recess were regularly scheduled safety drills. There were fire drills, tornado drills, and for the Cold War kids, nuclear bomb drills (duck and cover).

    I faintly remember the fire drills in grade school. The teachers emphasized walking in a calm, quiet, and orderly fashion, single file out of the classroom, down the stairs, and out the door. Each class had its own predetermined path that finished somewhere outside at a reasonably safe distance from the school. Continue Reading…


  • Happy Hour: Worst Real Estate Investment

    April 24, 2015

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    Jon

    The idea of being a landlord doesn’t appeal to me. That’s not to say real estate can’t be a good investment. It can. Like every other type of investing, it takes time to learn which investments work – be it a multi-unit building, condos, commercial property, land, or stocks, bonds, funds, etc. – so you actually make a decent profit over time.

    I bring this up because a recent Gallop poll came out showing real estate, of all things, is seen as the best long term investment…again. I guess it’s easier to get over a housing market crash than a stock market crash. Continue Reading…


  • The Benefit of International Diversification

    April 22, 2015

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    Jon

    Keynes QuoteWhat happens if you only invest in the U.S. stock market and it goes no where over a longer period of time, say a lost decade? Your stock allocation, built to grow your money, just failed. Something needs to pick up the slack. And there’s no guarantee your bond allocation will come through.

    Enter international stocks.

    At first sight, it may not seem like it matters when you compare the long term returns of U.S. stocks (S&P 500), international stocks (MSCI EAFE), and a 50/50 split since 1970. As the table below shows, having a portion of your stock allocation diversified internationally doesn’t improve your returns, but you don’t really lose much either. Continue Reading…


  • Happy Hour: Impulse Finances

    April 17, 2015

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    Jon

    People feel better about their finances. That’s what a recent Gallup poll says. Their bank accounts look fuller. Their retirement accounts look bigger. Their debt feels under control. Their monthly budget has money left over.

    A funny thing happens when people feel better about their finances. They’re willing to spend more money then they were in the past. And they buy stuff they want, not need. The feel good nature around money makes it easier to scratch the constant itch to upgrade your lifestyle. Impulse purchases are now on the table. Continue Reading…


  • Happy Hour: The Rate Question

    April 10, 2015

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    Jon

    There’s one question that’s been asked since last year and still hasn’t been answered – when will the Fed raise rates? Nobody has the answer, not even the Fed. Still, we ask the question because when it does happen, it will affect most asset classes.

    If you’re living under a rock, interest rates are at all time lows. That’s not a big secret but we’re stuck with this reality…for the moment.

    From different angles this is either good or bad news. Continue Reading…


  • How Avoiding Big Market Losses Impact Returns

    April 8, 2015

    ·

    Jon

    Avoiding Big LossesWe love to make money, but we hate to lose money even more. The ultimate investing strategy is the one that never loses money. Except that strategy doesn’t exist. The next best option is to control your investment risk to avoid the biggest losses.

    Lets imagine someone gifted enough to guess every losing year in the stock market. Of course, it’s more then just picking the losing years. They’d have put their money in cash for the losing years but be invested in the market for every other year too. They’d have to bat 1,000 and stick with it over time.

    The chart below shows exactly what their performance would look like, minus the losses in blue. Continue Reading…


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