Many people are questioning whether they should stay in fixed income or branch out to other strategies with higher expected returns, due to low interest rates. The following discusses viewing expected returns between investment strategies. The low interest rate environment has many people wondering about using their fixed income allocation for other strategies, such as…
In this article, we review our thoughts on the value of credit ratings within the municipal market. Even though ratings agencies appear to have misjudged the credit worthiness of some mortgage-backed securities leading up to the financial crisis of 2007–2009, we believe their ratings are still of importance in assessing the default risk of municipal…
In this article, we address why we believe the decision of hiring an advisor should not be based solely on fees. The quantity and quality of the services provided varies greatly from advisor to advisor. When you interview potential advisors, you should look for the advisor who gives the best advice and is the best…
It can be tempting to begin taking Social Security benefits the moment you are eligible. The following discusses some reasons why you may want to delay taking your benefits. You’re ready to retire and have paid a lot into the Social Security system. But now that you’re finally eligible for benefits, you might be hearing…
This article looks at six myths surrounding hedge funds and some of the reasons why many high net worth investors continue to invest in hedge funds despite growing academic evidence and reports by more than a few in the financial media that hedge funds are “mad, bad and dangerous.”1 The evolving body of information about…
Investors around the country and around the world may have experienced some panic when the scandal involving Bernard Madoff — described as a $50 billion Ponzi scheme — became known. Some investors may be wondering if their assets may fall prey to the same kind of situation. The following discusses why investors in mutual funds…
Several academic studies have shown hedge funds to be poor investment choices for prudent investors. Now, several scandals have added to the evidence on this being a poor asset choice. The investing world was rocked with the news of another hedge fund scandal, as Galleon Group founder Raj Rajaratnam was arrested with five others in…
One of the risks of investing in hedge funds involves tying up large amounts of assets in a single investment vehicle. The advent of funds of hedge funds supposedly provided advisors with a means of diversifying the risks of investing in hedge funds. Have investors been rewarded? The following article summarizes a study showing that…
Every year, Larry Swedroe takes a look back at the investing lessons the markets provided in the past year. While 2010 was a fine year for the markets, that doesn’t mean we can’t learn a thing or two about investing. In fact, we can be just as likely to lose our discipline in good times…
Overview : A typical vacation planning checklist is bound to include the usual considerations: booking a rental car, making hotel reservations and testing how much can really fit into that carry-on luggage. But not as many travelers consider what they would do if a serious health crisis were to occur on their trip. Following is…
Overview:Co-authors Alan Spector and Keith Lawrence wrote Your Retirement Quest: 10 Secrets for Creating and Living a Fulfilling Retirement based on a decade of research and interviews with more than 200 retirees. In this article, Alan and Keith discuss the crucial conversations that people should have as they consider retirement. Have you discussed your retirement…
Overview: Multigenerational planning involves the transfer of wealth, but it also extends to intangible concepts such as family values and legacy wishes. Conversations about multigenerational planning begin with the first generation.The success of an estate plan can depend on whether the details of that plan have been properly communicated to family members. Therefore, it is…
Is it a good idea to keep multiple accounts from previous employers? It is not unusual for an individual to acquire several retirement plan accounts over different phases of a career. When it comes to retirement accounts, simplicity is key. Having several plans may seem like a fail-safe in troubled times, but from a personal…
Overview: Following is a discussion of professors Eugene F. Fama’s and Kenneth R. French’s three-factor model, which appeared in the landmark 1992 Journal of Finance article, “The Cross-Section of Expected Stock Returns.” Introduction The June 1992 Journal of Finance article “The Cross-Section of Expected Stock Returns” revolutionized the way many individuals think about investing. Prior…
Overview: When saving for a child or grandchild’s college education, many individuals choose 529 college savings plans because of their tax advantages. 529 Plan Basics A 529 plan is similar to a Roth IRA in that you contribute after-tax dollars that grow tax free. Earnings from the plan can be withdrawn free of federal taxes…
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