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Happy Hour: Missing Efficient Markets

October 17, 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.

Missing Efficient Markets?

On Monday, Twitter became a rolling stream of market psychologists trying to talk whoever was listening off the ledge. It’s been rolling all week.

I miss the efficient markets. When fear, and other feelings, were theoretically impossible.

Less than a decade ago, none of this was possible. Sure, Twitter didn’t exist, but neither did emotion in the markets. Continue Reading…
A Saver’s Guide To Retirement Accounts

October 16, 2014

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Jon

Whether you’re putting money in or taking money out of a 401k or IRA, understanding how retirement accounts work, the different rules around each, and how these tools fit into your retirement plan has become a big part of meeting your retirement goals.

Retirement accounts are the single greatest savings tools around because of the tax benefits. Delaying taxes on dividends, capital gains, and income lets your savings grow faster without taking a tax hit each year. That tax savings compounds in a huge way when combined with a long-term horizon. And the tax deduction, if you qualify, has the added bonus of lowering your tax bill. All you need is a basic understanding of how retirement accounts work to turn the tax code into more savings for you. Continue Reading…
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…