Short-term trading is an act of great arrogance: You assume you know better than the market—and that you’ll quickly be proven right.
“YOU’RE FIRED” was made famous by Donald Trump as host of The Apprentice. Imagine my surprise when my broker delivered the same message to me two years ago.
In 2015, my job was transferred to Texas. I opted to become a long-distance commuter, while my family stayed in Maryland. Around that time, we moved homes, so our son could attend a better high school. In addition, I was helping to launch two huge long-term work projects.
AMONG THE 16 million who served during the Second World War, many returned home, started families and pursued what would become an integral part of the American dream: homeownership. It’s during this time that the term “starter home” was coined.
My grandfather was one of those proud vets. He and my grandmother bought a place in South Dakota, where they started our family.
In 1950, the average new single-family home was 983 square feet.
IN 2015, I was selected for the “leadership pipeline program” at the major bank where I worked. It was a 10-month-long program for minority employees just below executive level. We were selected to learn all about corporate culture and what it took to advance to the next level. I felt honored to be among such talented and promising employees.
Participants were from various departments from across the U.S.—technology, risk management, operations, compliance, human resources,
BABY BOOMERS are retiring every day and Generation X is right on their heels. With this, an increasingly large amount of wealth is making its way into IRAs and Roth IRAs, thanks to rollovers from employer retirement plans.
I’ve found that many folks don’t quite grasp the complexities of such accounts. On the surface, they seem pretty simple: You contribute to an IRA or Roth IRA, receive tax-deferred growth and then gradually withdraw the funds during retirement.
AS THE OLD saying goes, there are lies, damned lies and statistics. And then there’s investment performance, which may deserve a category all its own.
This topic came to mind recently when I saw a press release heralding the accomplishments of a retired nonprofit executive. Among the claims: that he had doubled the organization’s endowment. This struck me as impressive—until I considered it more critically. What did it mean that he had doubled the endowment?
YOU COULD ARGUE that U.S. stocks are reasonably priced, with the S&P 500 companies trading at 22 times their reported earnings for the past 12 months. That’s not much above the 50-year average of 19.3—and hardly outrageous, given today’s modest bond yields.
But you could also argue that U.S. shares are horribly overpriced. The S&P 500 stocks today offer a dividend yield of just 1.9%, versus a 50-year average of 2.9%. Shares also seem pricey compared to both the value of corporate assets and average company profits for the past 10 years.
GOING ON a first date? Among millennials, 37% expect to split the tab, versus 26% for those who are older, according to a Bankrate survey.
NO. 41: VERY FEW of us need life insurance for our entire life. That’s why term insurance makes sense and cash-value policies are usually a mistake—despite what insurance agents say.
NO. 60: SHORT-TERM results matter to long-term investors. Even if you’re investing for the long haul and have a strong stomach for short-term price swings, this volatility can still have a huge impact on your long-run returns. Want to retire rich? Pray for lousy markets now—and buoyant markets as you approach retirement.
FREEZE YOUR CREDIT—something you can now do at no cost. This will prevent data thieves from taking out loans and credit cards using your identity. But it also means you’ll need to contact the three credit bureaus and unfreeze your credit temporarily whenever applying for credit. Sound like a hassle? As an alternative, consider setting up a fraud alert.
INFLATION RISK. Suppose inflation runs at 2.5% a year. If you were living off a traditional employer pension or interest from long-term bonds, your income would lose more than half its spending power over a 30-year retirement. What to do? You might keep more in stocks, while also delaying Social Security so you have more inflation-indexed income.
HumbleDollar is edited by Jonathan Clements, former personal finance columnist for The Wall Street Journal.
“YOU’RE FIRED” was made famous by Donald Trump as host of The Apprentice. Imagine my surprise when my broker delivered the same message to me two years ago.
In 2015, my job was transferred to Texas. I opted to become a long-distance commuter, while my family stayed in Maryland. Around that time, we moved homes, so our son could attend a better high school. In addition, I was helping to launch two huge long-term work projects.
AMONG THE 16 million who served during the Second World War, many returned home, started families and pursued what would become an integral part of the American dream: homeownership. It’s during this time that the term “starter home” was coined.
My grandfather was one of those proud vets. He and my grandmother bought a place in South Dakota, where they started our family.
In 1950, the average new single-family home was 983 square feet.
IN 2015, I was selected for the “leadership pipeline program” at the major bank where I worked. It was a 10-month-long program for minority employees just below executive level. We were selected to learn all about corporate culture and what it took to advance to the next level. I felt honored to be among such talented and promising employees.
Participants were from various departments from across the U.S.—technology, risk management, operations, compliance, human resources,
BABY BOOMERS are retiring every day and Generation X is right on their heels. With this, an increasingly large amount of wealth is making its way into IRAs and Roth IRAs, thanks to rollovers from employer retirement plans.
I’ve found that many folks don’t quite grasp the complexities of such accounts. On the surface, they seem pretty simple: You contribute to an IRA or Roth IRA, receive tax-deferred growth and then gradually withdraw the funds during retirement.
AS THE OLD saying goes, there are lies, damned lies and statistics. And then there’s investment performance, which may deserve a category all its own.
This topic came to mind recently when I saw a press release heralding the accomplishments of a retired nonprofit executive. Among the claims: that he had doubled the organization’s endowment. This struck me as impressive—until I considered it more critically. What did it mean that he had doubled the endowment?
YOU COULD ARGUE that U.S. stocks are reasonably priced, with the S&P 500 companies trading at 22 times their reported earnings for the past 12 months. That’s not much above the 50-year average of 19.3—and hardly outrageous, given today’s modest bond yields.
But you could also argue that U.S. shares are horribly overpriced. The S&P 500 stocks today offer a dividend yield of just 1.9%, versus a 50-year average of 2.9%. Shares also seem pricey compared to both the value of corporate assets and average company profits for the past 10 years.
GOING ON a first date? Among millennials, 37% expect to split the tab, versus 26% for those who are older, according to a Bankrate survey.
NO. 41: VERY FEW of us need life insurance for our entire life. That’s why term insurance makes sense and cash-value policies are usually a mistake—despite what insurance agents say.
FREEZE YOUR CREDIT—something you can now do at no cost. This will prevent data thieves from taking out loans and credit cards using your identity. But it also means you’ll need to contact the three credit bureaus and unfreeze your credit temporarily whenever applying for credit. Sound like a hassle? As an alternative, consider setting up a fraud alert.
NO. 60: SHORT-TERM results matter to long-term investors. Even if you’re investing for the long haul and have a strong stomach for short-term price swings, this volatility can still have a huge impact on your long-run returns. Want to retire rich? Pray for lousy markets now—and buoyant markets as you approach retirement.
INFLATION RISK. Suppose inflation runs at 2.5% a year. If you were living off a traditional employer pension or interest from long-term bonds, your income would lose more than half its spending power over a 30-year retirement. What to do? You might keep more in stocks, while also delaying Social Security so you have more inflation-indexed income.
HumbleDollar is edited by Jonathan Clements, former personal finance columnist for The Wall Street Journal.