Happy Hour: Worst Real Estate Investment

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…

Happy Hour: Impulse Finances

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

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…

Happy Hour: Side Effect of Indexing

I ran across a hypothetical question – what happens when Vanguard owns everything? – which was followed up with a rebuttle and reply. For something that will never happen it was a decent read with a nugget of information buried at the bottom:

Financial Analysts Journal paper by Rodney Sullivan and Morningstar’s own James Xiong that raises a warning flag about spillover effects with market-cap indexing. In the words of the authors, the growth in market-cap indexing has led to “increased volatility” and “marketplace fragility.”

That brings up another question – whether indexing can get too big? Continue Reading…

Happy Hour: Not Much Has Changed

Earlier this week, I found a video on Youtube of Peter Lynch speaking at the National Press Club back in 1994. It’s embedded below. If you’ve read Lynch before, you’ll recognize a lot of what he says.

He covers the basic ideas around how he invests: know what you own, invest in what you understand, focus on facts, study market history, take advantage of volatility in markets, and use your edge.

Here are a few of his more entertaining and useful quotes from the event: Continue Reading…