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Happy Hour: P2P Disruption For Who?

October 10, 2014

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Jon

Welcome to the end of the week! Just sit back, relax, and enjoy this weeks roundup in another edition of Happy Hour.

P2P Disruption?

Bloomberg did a piece on the future of the finance industry that’s worth reading. In it, they interviewed Marc Andreessen on the potential for disruption in the finance industry. I won’t argue against the possibilities. We already see it with low-cost index funds,robo-advisors, and peer-to-peer lending. The finance industry is ripe for change and these are very early days.

Though, I’m not convinced P2P lending is the disruption it was meant to be. Who really wins? Continue Reading…
Template For the Next Market Crash

October 9, 2014

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Jon

Crashes happen. That’s a risk we take when investing. Lets face it, most of us are better off not following the daily stock market news. Tuning out is one way to leave your investments alone. Until a crash happens, then it’s hard to ignore.

Some event triggers it all. The media showcases the emotion of the day. It starts with frustration, then worry, moves to fear, until panic sets in. It’s a process that sometimes takes weeks or months.

Headlines spread the scary news. A parade of experts all have THE answer for what will happen next. Each one is different and extreme. All of them are wrong. But it doesn’t matter, they’re “experts”.

Articles rehash the events for weeks, and months, along with every anniversary there after. We give these days colorful names like Black Monday and Black Tuesday. Continue Reading…
Happy Hour: Don’t Be A Loser

October 3, 2014

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Jon

Welcome to the end of the week! Just sit back, relax, and enjoy this weeks roundup in another edition of Happy Hour.

Don’t Be A Loser

Gallop released its latest Optimism Index numbers early this week. The seven-year highs seem like a big deal even though it’s not even half of where it was in 2007.

The poll was conducted a month ago. I wonder where investors stand after the past two weeks? Squeamish? Skittish? Optimistically cautious? Walking on eggshells? Continue Reading…
Best Time To Own The S&P 500

October 2, 2014

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Jon

Would it surprise you that the S&P 500 historical returns tell an eerily similar story to the history of international stock returns. Despite it, people still see the market as a casino or they complicate it with some overly elaborate strategy.

The S&P is the standard benchmark for large cap performance. It’s also an index you can own via ETF or index fund. While the experts argue whether now is a great time to buy the S&P, history tells you a better story.

The S&P 500 has been around in some form since 1926. That gives us 88 years of annual returns to dig through. Since large cap stocks make up a big part of most allocations, this should give you an idea of what to expect from that piece of your portfolio.
Continue Reading…
Happy Hour: Stagnant Income And The Internet Of Things

September 26, 2014

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Jon

Welcome to the end of the week! Just sit back, relax, and enjoy this weeks roundup in another edition of Happy Hour.

Income Stagnation

Much has been discussed lately about a lack of rising income. Higher wages is typically a sign of an improving economy, which we haven’t seen yet. As FiveThirtyEight points out, income has actually fallen for the average middle class worker over the past 15 years.

I doubt it’s a coincidence that incomes have stagnated at the same time the internet technology disruption has commoditized many products and services. Continue Reading…
How Much Money Do You Need To Retire?

September 25, 2014

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Jon

The million dollar question. Or is it two million? Either way, it’s hard to save for anything without knowing how much you need. When it comes to how much you need to retire, there’s no perfect answer.

The answer, in its entirety, is a series of educated guesses, along with dirty math, to come up with a fuzzy number you’ll need to live off throughout retirement.

I don’t say this to discourage you. Understand, we’re predicting the future based on past averages. You’re projections need to account for: inflation, expected returns (and an asset allocation to get you there), your ability to save, and your behavior along the way.

It’s simply not a perfect science. Retirement calculators work in a vacuum, reliant on fixed numbers. The economy and the stock market don’t move in a straight line or act rationally at all times. Continue Reading…