Fortunes aren’t made being conservative. Nobody has gotten rich earning less than 1% on their money. Yet more money has been put into savings accounts than into stock and bond funds, since the market crash of ’08. This may sound like a good thing. At first glance it looks as though people are building up their emergency funds. A great sign of financial responsibility, if it were only true.
The first 11 months of 2011, retail investors put over $900 billion into savings accounts. During the same period only $109 billion was investing into stock and bond funds. Putting money into a mattress is never a good idea, but expecting to reach financial goals earning less than 1% is just as bad.
A look at the chart below shows how extremely different the amounts of money saved and invested have become since the ’08 crash. Which isn’t that surprising really. The fact that the numbers haven’t returned to a more normalized setting after four years should be questioned. Continue Reading…
People are constantly on the lookout for the perfect investment strategy. The Holy Grail of constant profitable returns. Unfortunately, no strategy is perfect in the sense that it will guarantee returns. In fact, I’ll argue that only having one strategy limits your ability to invest profitably.
Let’s face it, investing is complicated, time-consuming, and just scary sometimes, especially when it’s looked at for the first time and Betterment believes it has the answer to these problems.
Last week both the House and Senate approved the payroll tax extension, sending it on to the president to sign into law. Which will happen amid a bunch of hoopla and congratulations about how your elected leaders saved your wallets from the plight of emptiness.