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The one thing better than harvesting tax losses is having no losses to harvest.

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Carrying Humble Dollar Forward

"Please do! Your writing style (and kind, thoughtful comments) very much remind me of your brother."
- kristinehayes2014
Read more »

Perfection, enemy of good

"Agreed! I put some money in a target date fund many years ago and it has served me well. Its built in shift towards more conservative investments over time appeals to my naturally conservative self."
- kristinehayes2014
Read more »

Getting Older

"When we moved to Arizona in 2022, we did it via U-Hauls. Thankfully we aren't 'accumulators' so one trailer and two of their 'pods' was all we needed. But that was plenty. I vowed at that point we would pay someone if we ever moved again."
- kristinehayes2014
Read more »

Wisdom, from the wisest women I know

"I love this post. As a frugal woman, I feel an instant bond to both your Mum and wife. I've never been a 'shopper' or a traveler. When I see homes in our community filled (and I do mean FILLED) with clutter, it makes my brain hurt. My passion is (and always has been) animals. And I am delighted that these days I can indulge (spoil) our dogs a bit more than I might have in the past."
- kristinehayes2014
Read more »

The Opportunity Cost of Waiting

"Boy, that’s a tough four weeks, Mark. Thanks for sharing your contemplations, they certainly hit home for me. "
- DAN SMITH
Read more »

Recency Bias (or: You’re Running Buggy Software)

"I agree that recency bias is important. The “news” can be equally detrimental to our financial plans. I should restate that and say I think we should be very selective about our information sources. I prefer written ones, but AI “slop” is making it even more difficult to get a grasp on reality.  With all of the negativity, what’s the reality for my accounts? I’m using data as of 4/7/2026.  I would hope that HD readers are “long term” investors. By that I mean investing with the intention to hold for 10-15 years.  I do use a long-term approach and it has worked for me. Of course, there are short-term ups, and downs. For example, I own a TIPS fund and even with dividends the current value shows a “loss” of 2.96%. But that fund is only 1.92% of my portfolio ( I prefer to hold bonds). The real decline to the portfolio is 0.058%. That miniscule amount is hardly worth thinking about.  I think it is useful to define investment gyrations as declines or increases. After all, there is no loss incurred (or gain) until one sells and cashes out.  Anything purchased recently may show a short-term decline in value. If we think long-term, it is reasonable to assume there will be an increase in the future. Certain, more volatile stocks or investments may not behave with the overall stock market. That’s the nature of speculation.  My point is, even a 50/50 portfolio can do very well, long term. Mine has. However, I’m retired and so I am prudently more conservative and practice wealth defense. This would not be my approach if I were more than 10 years from retirement.   My portfolio currently shows an increase in value of 0.4% since 12/31/2025. It shows an increase of 10.25% since 12/31/2024. The increase would be greater if I didn’t take RMDs, and if I hadn’t withdrawn 10% in 2023. The S&P 500 shows a recent decline of about 2.6%.  Certain investments have been helpful to me. My Gold and Precious Metals fund shows a recent decline in value, although it is up about 130%. A utility I purchased in 2014 is up 400%. My energy ETF is up about 250%. There are 15 holdings which have more than doubled in value.  Even the S&P 500 shows a 5-year gain of 62%, excluding dividends.  If, after analyzing your portfolio you find it to be too volatile or subject to larger declines recently, let’s say greater than 10%, then perhaps you should re-evaluate your approach. However, if you are young, you may have decades of investing ahead  If the market perturbation is disturbing, take a look at your net worth. With recent real estate value increases many of us have seen an increase in our net worth, even if we fully depreciate automobiles, etc. In my case, because I have not spent all of my annual RMDs, the remainder goes into savings. That too has improved my net worth.  "
- normr60189
Read more »

Blood Money

"Here's a podcast episode on the topic, from Ed Slott & Jeffrey Levine: https://open.spotify.com/episode/0C0CfDdTmFKsR07DBLkuJu?si=2PpP8uw1SJW45ijpYlSJxQ"
- Randy Dobkin
Read more »

Financial regrets about parenthood?

"That would indeed be a terrific article idea, Kristine, especially since financial planning for elder care is top of mind for many still-working couples. My own household is a dream situation for an elderly person. Mama (my MIL) is the center of attention for both her daughters and her son-in-law. Even the dog listens to her."
- Mike Gaynes
Read more »

Any concern?

"I’m near retirement and all set with the portfolio AA initial conditions, specifically with a healthy dose of fixed income ready to weather an inevitable market downturn. What I’m a bit unsure of is refilling my fixed income efficiently &!sufficiently as time goes on. I have the usual plan of rebalancing and its nuances, but we’ll see how it goes. I’m fairly confident, have read a ton and run the numbers but haven’t done this before. Retirement: There’s always that first time ;)."
- Andy Morrison
Read more »

Tax Efficiency

TAX EFFICIENT FUND placement is an often underrated topic. The goal of the tax efficient fund placement is to minimize taxes within your investments, and select the right account for those investments.

But how much does that actually matter?

Vanguard’s research finds that a thoughtful asset location strategy can add significantly more value than an equal location strategy. The value added typically ranges from 5 to 30 basis points of after-tax return, depending on circumstances (e.g., income, portfolio size).

Investors generally have access to different account types, including:

  • Tax-free accounts (Roth IRA, Roth 401(k))
  • Taxable brokerage accounts
  • Tax-deferred accounts (401(k), 403(b), Traditional IRA)

If you are an employee that may not have access to a retirement plan, you could perhaps consider a Solo 401(k) if you have "side hustle" business income.

Generally, if your investments are all in tax-deferred or tax-free accounts, fund placement will not make a huge difference for you. That is because these accounts already come with tax efficiency.

If that's your case, two things become important though:

1. Consideration between pre-tax, like Traditional 401(k) or after-tax account, like Roth 401(k). Put simply, this decision generally comes down to your marginal tax rate now versus marginal tax rate in the future (which isn't something easy to predict due to the ever-changing tax landscape).

2. Account allocation. It becomes equally important where exactly you are investing. Roth accounts grow tax-free and qualified withdrawals are tax-free. You likely don't want to hinder that growth by choosing conservative assets (like fixed income, Money Market Funds, and so on).

Tax-efficient fund placement becomes extremely important when you also have a taxable brokerage account, along with tax-advantaged accounts. Many funds pay dividends and distribute capital gains if placed in your taxable brokerage account. At the end of the year, you receive a 1099 with that income and must pay taxes on the dividends and certain distributions.

One thing to call out from history is that you generally shouldn't hold Target Date Retirement mutual funds (or any "proprietary" funds) in your brokerage account. This is because unexpected redemptions could cause a huge tax bill.

You may remember a Vanguard 2021 fiasco where Vanguard opened an institutional TDF to more investors (lowered the minimum investment from $100M to $5M), which caused smaller retirement plans to sell out of individual funds and move into the institutional fund. This triggered massive unexpected capital gains for anyone invested in the individual funds if held in a brokerage account.

All of those unnecessary taxes could've been avoided by:

  • Choosing investments that don’t distribute many dividends or capital gains
  • Choosing passively managed investments (low portfolio turnover)
  • Placing them in tax-advantaged accounts

Let me give you a simple example:

Let’s say you are in a 22% federal tax bracket and a 5% state tax bracket, and you have some money invested in a dividend fund like Schwab US Dividend Equity ETF (SCHD). SCHD dividends are generally qualified, which means that the dividends get preferential treatment at a 15% federal tax rate for this investor.

The dividend yield is 3.43%. Considering the tax rates, the tax drag is (15% + 5%) * 3.43% = 0.686%.

To put this in perspective, a $10,000 investment will yield ~$343 in annual dividends. The tax impact on that investment will be $60.86.

Of course, if that money was in a Roth IRA, you would pay $0 in taxes on dividend distributions. Alternatively, this is something you may need to decide whether a dividend-focused investing strategy is the right one for you. For example, a Total US Stock Market ETF could have almost 3x less tax drag, and potentially more growth.

As someone in their 20s (who is subject to the Net Investment Income Tax) my focus is 100% on a growth investment strategy, rather than income generation. For someone in their 60s, that strategy could be different (even though selling shares for capital gains is better from a tax timing point of view).

A few more important points:

REIT stocks/ETFs are the least tax-efficient asset class to hold in a brokerage account because their distributions aren’t qualified, so you pay more tax (even though it may qualify for a 199A deduction).

Stocks that don’t pay dividends are the most tax-efficient to hold within your taxable account (Adobe, Amazon, Netflix, and others). However, holding individual stocks may not be the best strategy from an investment and diversification standpoint.

A big benefit of a taxable account is that the money is always easily accessible (liquidity), and you can control your withdrawal timing. While there are strategies that allow you to withdraw from retirement accounts before age 59 (like Rule of 55, 72(t) SoSEPP, Roth conversions), a brokerage account is more flexible. Therefore, analyzing the contributions and investments that go into this account is crucial.

How do you maximize tax efficiency? Let us know in the comments!   Bogdan Sheremeta is a licensed CPA based in Illinois with experience at Deloitte and a Fortune 200 multinational.  

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The Home Ownership Gamble

"Dana, we experienced something similar with our first and 2nd homes (almost the same year of purchase as well), except that we sold our first home for exactly what we paid for it and had been underwater for the 8 years (4 more than the original plan) we owned it. The 2nd home, the one we raised our kids in and still own has more than tripled in value. Of course we have done lots of improvements that we wanted to and ultimately we have a relationship with our home-comfort, memories, a solid sense of security-and it has been a forced savings that has allowed us to build a certain amount of wealth which we can touch if needed. I see the memes about moving every 2 years and pocketing the increase in value tax free but real estate (like all investments) is volatile and if you're counting on it always going up, there will sometimes be disappointment. But if you are purchasing a home for reasons other than "just" investment" there is nothing like a place of ones own."
- Rachna Condos
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Simplify Everything

"Kristine: The subscription auto-shipment thing is a great idea too. Like you, we have that set up for our dog food needs (we have two hungry border terriers), and certain over the counter medications and pantry items that we consistently use. That adds to the list of things to not have to remember, not run out of and not have to go shopping for. We also make a weekly Costco run, but at this point it is still something I enjoy and I coordinate that visit with my weekly gasoline fill up. But, thanks for the "Instacart" subscription idea. I'll have to remember that for future reference."
- Doug C
Read more »

Carrying Humble Dollar Forward

"Please do! Your writing style (and kind, thoughtful comments) very much remind me of your brother."
- kristinehayes2014
Read more »

Perfection, enemy of good

"Agreed! I put some money in a target date fund many years ago and it has served me well. Its built in shift towards more conservative investments over time appeals to my naturally conservative self."
- kristinehayes2014
Read more »

Getting Older

"When we moved to Arizona in 2022, we did it via U-Hauls. Thankfully we aren't 'accumulators' so one trailer and two of their 'pods' was all we needed. But that was plenty. I vowed at that point we would pay someone if we ever moved again."
- kristinehayes2014
Read more »

Wisdom, from the wisest women I know

"I love this post. As a frugal woman, I feel an instant bond to both your Mum and wife. I've never been a 'shopper' or a traveler. When I see homes in our community filled (and I do mean FILLED) with clutter, it makes my brain hurt. My passion is (and always has been) animals. And I am delighted that these days I can indulge (spoil) our dogs a bit more than I might have in the past."
- kristinehayes2014
Read more »

The Opportunity Cost of Waiting

"Boy, that’s a tough four weeks, Mark. Thanks for sharing your contemplations, they certainly hit home for me. "
- DAN SMITH
Read more »

Recency Bias (or: You’re Running Buggy Software)

"I agree that recency bias is important. The “news” can be equally detrimental to our financial plans. I should restate that and say I think we should be very selective about our information sources. I prefer written ones, but AI “slop” is making it even more difficult to get a grasp on reality.  With all of the negativity, what’s the reality for my accounts? I’m using data as of 4/7/2026.  I would hope that HD readers are “long term” investors. By that I mean investing with the intention to hold for 10-15 years.  I do use a long-term approach and it has worked for me. Of course, there are short-term ups, and downs. For example, I own a TIPS fund and even with dividends the current value shows a “loss” of 2.96%. But that fund is only 1.92% of my portfolio ( I prefer to hold bonds). The real decline to the portfolio is 0.058%. That miniscule amount is hardly worth thinking about.  I think it is useful to define investment gyrations as declines or increases. After all, there is no loss incurred (or gain) until one sells and cashes out.  Anything purchased recently may show a short-term decline in value. If we think long-term, it is reasonable to assume there will be an increase in the future. Certain, more volatile stocks or investments may not behave with the overall stock market. That’s the nature of speculation.  My point is, even a 50/50 portfolio can do very well, long term. Mine has. However, I’m retired and so I am prudently more conservative and practice wealth defense. This would not be my approach if I were more than 10 years from retirement.   My portfolio currently shows an increase in value of 0.4% since 12/31/2025. It shows an increase of 10.25% since 12/31/2024. The increase would be greater if I didn’t take RMDs, and if I hadn’t withdrawn 10% in 2023. The S&P 500 shows a recent decline of about 2.6%.  Certain investments have been helpful to me. My Gold and Precious Metals fund shows a recent decline in value, although it is up about 130%. A utility I purchased in 2014 is up 400%. My energy ETF is up about 250%. There are 15 holdings which have more than doubled in value.  Even the S&P 500 shows a 5-year gain of 62%, excluding dividends.  If, after analyzing your portfolio you find it to be too volatile or subject to larger declines recently, let’s say greater than 10%, then perhaps you should re-evaluate your approach. However, if you are young, you may have decades of investing ahead  If the market perturbation is disturbing, take a look at your net worth. With recent real estate value increases many of us have seen an increase in our net worth, even if we fully depreciate automobiles, etc. In my case, because I have not spent all of my annual RMDs, the remainder goes into savings. That too has improved my net worth.  "
- normr60189
Read more »

Blood Money

"Here's a podcast episode on the topic, from Ed Slott & Jeffrey Levine: https://open.spotify.com/episode/0C0CfDdTmFKsR07DBLkuJu?si=2PpP8uw1SJW45ijpYlSJxQ"
- Randy Dobkin
Read more »

Financial regrets about parenthood?

"That would indeed be a terrific article idea, Kristine, especially since financial planning for elder care is top of mind for many still-working couples. My own household is a dream situation for an elderly person. Mama (my MIL) is the center of attention for both her daughters and her son-in-law. Even the dog listens to her."
- Mike Gaynes
Read more »

Any concern?

"I’m near retirement and all set with the portfolio AA initial conditions, specifically with a healthy dose of fixed income ready to weather an inevitable market downturn. What I’m a bit unsure of is refilling my fixed income efficiently &!sufficiently as time goes on. I have the usual plan of rebalancing and its nuances, but we’ll see how it goes. I’m fairly confident, have read a ton and run the numbers but haven’t done this before. Retirement: There’s always that first time ;)."
- Andy Morrison
Read more »

Free Newsletter

Get Educated

Manifesto

NO. 29: WHAT MATTERS to long-term stock investors is the market’s dividend yield and growth in earnings per share. Everything else is noise that can bully and seduce us into foolishness.

think

MONEY ILLUSION. We have the illusion we’re doing better if we earn 5% on our savings rather than 1%, even if these yields simply match the inflation rate—and hence in both cases we aren’t making any financial progress. In fact, earning 5% when inflation is 5% leaves us worse off, because we’ll lose more to taxes than in the lower-yielding scenario.

act

PREPARE FOR a long life. For a quick gauge of your life expectancy, try the Social Security and Society of Actuaries' Longevity Illustrator calculators. What will you learn? First, the longer you live, the longer you can expect to live. Second, lifespans vary widely. Educated, health-conscious Americans might live three or four years longer than average.

Truths

NO. 27: COST-CONSCIOUS investors can save thousands over their lifetime. Take two investors who salt away $5,000 a year for 40 years. One pays 1% of assets in annual investment costs, while the other incurs 0.1%. If both earn 5% a year before expenses, the cost-conscious investor will amass $618,000, while the high-cost investor garners $494,000.

Stocks bonds cash

Manifesto

NO. 29: WHAT MATTERS to long-term stock investors is the market’s dividend yield and growth in earnings per share. Everything else is noise that can bully and seduce us into foolishness.

Spotlight: Retirement

What wisdom can you share?

My wife and I are 58 and 66, respectively. She’ll be retiring soon, but expects to launch herself in a new job for at least several years. I expect to continue working until just after turning 70. I’m in my dream job as the president of my local community bank. We are in our forever home enjoying single floor living. We’re both healthy and travel for a short and long vacation annually. Our four  kids are launched in their careers and doing well;

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Is it possible to achieve financial well being without a plan or even a spreadsheet?

Based on the feedback I have received on HD over the years mostly directed at my failure to budget or track expenses in detail using spreadsheets, my selection of some high expense investments and to not pay much attention at all to our investments, failure to use financial or retirement planning services, retaining life insurance in retirement, beginning Social Security at FRA while working, buying cars for cash, retiring at age 67(part of my income replacement strategy),

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2025 Retirement Countdown

It’s January 1, and my retirement countdown app says “5 months and 29 days”! Now that it’s 2025, it really seems close.
I have a bunch of financial tasks of my winter quarter sabbatical/pre-retirement list and have already taken care of the first two:

Increase (double) contributions to my tax-deferred accounts (403B/457). With over-50 catch-up contributions, in 2025, I can contribute $31,000 max to each account, or $62,000 total. Since I’ll only be working for six of the 12 months,

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Personal Finance Reading List

LOOKING FORWARD TO some downtime over the holidays? Below are some favorite new personal finance books and articles to consider for your reading list.
A Richer Retirement by William Bengen – Back in the 1990s, financial planner William Bengen developed what’s come to be known as the 4% rule. It’s a framework to help retirees determine a sustainable portfolio withdrawal rate. This year, Bengen updated and expanded his research. The most compelling addition: Bengen addresses the question of asset allocation.

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When the Spreadsheet Gets Real

I’m 58 and my wife is 56. We’ve been planning our retirement with care and intention for years—no debt, solid retirement savings, a well-diversified portfolio, and a liability-matching plan (LMP) that covers us until Medicare kicks in. We’ve talked through our priorities, run the numbers, and built our plan together. The core approach to our plan was heavily influenced by Bill Bernstein and Wade Pfau’s writing and we are content with a good funded ratio.
One thing we agreed on early: when one of us loses or leaves work,

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Going too far with FIRE: The downside of being in the financial advice business – RDQ

I always thought the glowing stories of FIRE folks were a bit dodgy. Much of the time they aren’t even retired in the traditional sense. Sometimes they go too far sharing their acquired wisdom for cash.
I followed one blogger for several years. She shared her frugal ways, extreme in my view like buying her two-year olds shoes in a second hand thrift shop. She wrote a book, gained a lot of publicity, was featured in news articles and gave advice. 

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Spotlight: Ehart

Not My Game

INVESTING CAN AND should be simple—and yet sometimes I make it so hard. Blame it on my ego and a faulty belief in my ability to pick winners among exchange-traded funds (ETFs) and, once in a while, individual stocks. Problem is, I’ve had a few things go my way this year. Now that know-it-all feeling is rearing its ugly head again—“hey, I can pick stocks and sectors”—even though it’s hurt me badly in the past. Convincing myself that I don’t know how to pick winners, and that no amount of research will help, is the key to sticking to indexing and avoiding costly investment blunders. Even so, some proponents of indexing devote a small portion of their portfolios to what they call a “fun money” account. A young Merrill Lynch financial advisor hoping for my business recently called that portion of a portfolio the “sandbox.” I don’t care for either phrase, yet I do have some investments that aren’t market-capitalization-weighted index funds. I pick more narrowly focused ETFs and stocks when I’m trying to get an edge on the market or hedge against some potentially adverse development. On the days when I feel an unbridled enthusiasm for my ideas, I enjoy being an active investor. But on other days, I can be beset with anxiety over my holdings. You see, I know most of my investment moves haven’t worked out in the past. The closer I’ve stuck to indexing, the better my performance has been—both in relative and absolute terms. Still, this year, I’ve lucked out big time with the only individual stock I’ve purchased in several years, plus I’ve had another winner with a stock I inherited but opted not to sell right away. I was bequeathed a relatively small position in Exxon Mobil (symbol: XOM) late last year.…
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Durn Furriners

A BURNING QUESTION has only gotten hotter as foreign stocks have lagged disastrously over the past dozen years: Should any of your stock market money be overseas? Most experts say “yes.” Vanguard Group, for one, recommends investors allocate 40% of their stock investments to foreign markets. In fact, some pundits have smugly derided what they call the “home bias” of those U.S. investors who avoid or underweight foreign stocks. Those stocks currently make up about 45% of world market capitalization. That smugness has waned considerably since 2007, as the S&P 500 Index has delivered a compound annual growth rate of 8%, versus 2% for MSCI’s Europe, Australasia and Far East (EAFE) index of developed country stocks. That’s a lot of opportunity cost. If emerging markets were included, the picture would look even worse. Vanguard Emerging Markets Index Fund is up a cumulative 10% over the past 12 years, compared with 29% for EAFE and 163% for the S&P 500. For this article and in the accompanying chart, I compare the S&P 500 and EAFE. The latter index goes back to 1970. By contrast, emerging markets indexes are relatively new, so it’s hard to do long-term comparisons. The data in the chart suggests investors can’t expect a “free lunch” by diversifying into foreign stocks. That phrase was used by Harry Markowitz, who introduced Modern Portfolio Theory in 1952. According to MPT, combining assets with similar long-term return potential but low correlations can boost portfolio returns while reducing volatility. Trouble is, foreign stocks have offered neither low correlations nor comparable returns for 12 years—and they didn’t in the 1990s, either. The only sustained period of foreign outperformance since 1989 was in 2002-07. Since the EAFE index’s inception in 1970, the S&P 500’s cumulative return has been double that of EAFE. But don’t…
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Weight Problem

MICHAEL BURRY WAITED years to be rewarded for his bet against subprime mortgages. Actor Christian Bale, in the movie version of Michael Lewis’s book, The Big Short, portrays Burry curled up in the fetal position on the floor of his office. When the financial crisis finally hit in 2008, he made $100 million. I’m no Michael Burry and the chance I’ll ever see $100 million is about 100 million to one. But I know what it’s like to bet against the market and wait vainly to be rewarded for it. Now, Burry sees a bubble in market cap. He says the obliteration of active management by indexing has caused large-cap companies to become overvalued and small-cap value stocks to become, well, smaller and more undervalued. In this case, I can truthfully say I’m years ahead of Michael Burry, because I’ve long worried that large-company stocks are overvalued, especially the popular growth stocks. It’s not like I’m a genius—just a worrier who fancies himself a contrarian. Friends call me more of a contrarian indicator, which—sadly—the record confirms. Still, to use a phrase popular with our president, “many people are saying”—especially those with a stake in selling smart beta ETFs—that the biggest-cap stocks are headed for trouble. Traditional index funds weight stocks according to their total stock market value, so the bigger a company, the more the funds have to invest. By contrast, smart beta, or factor investing, involves weighting stocks by fundamental characteristics such as corporate profits and dividends, or equal weighting stocks in an index, or simply overweighting small-cap stocks. The argument is seductive. Results have been mixed. Nothing boosts the ego like knowing something the crowd doesn’t. Truth be told, it boosts our ego just to think we know more than everyone else. It’s gratifying until the market doesn’t cooperate. Let me…
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Actively Subtracting

A NEW RESEARCH report confirms that there are darn few reasons to consider an actively managed fund over an index fund—and, indeed, this year’s bear market has made the case for active funds even weaker. Remember active fund managers, those stars of TV and magazines in days of yore? Purportedly, they could beat their relevant indexes by buying the best-performing stocks and bonds, shifting sector and country weights, and sidestepping market pitfalls. That notion seems almost quaint today—because it’s been proved so thoroughly and repeatedly wrong. Almost no one can consistently beat the market, except by luck. That said, the semiannual Morningstar Active/Passive Barometer had highlighted a handful of fund categories—out of 20 that the Chicago research firm tracks—where more than half of the lowest-cost active funds had gone on to beat the average of index funds over various time periods. In some cases, three-quarters or more of the lowest-cost active funds—those with expense ratios in the bottom 20% of their category—had beaten the index funds over 10-year periods. The data include funds that have folded or merged, so there’s no survivorship bias. Sound promising? Trouble is, like so much investment information, it’s based on historical market conditions that might not be repeated. Therein lies the rub. When compared to its previous report with results through Dec. 31, 2021, Morningstar’s latest barometer—with data through June 30—shows noticeably lower 10-year success rates for those fund categories where active managers had earlier prevailed. One reason for the setback: Many active managers try to beat the indexes by taking on more risk, and that’s hurt during this year’s bear market. In the accompanying chart, you'll find the five categories with favorable success rates for the lowest-cost active funds over the 10 years ended Dec. 31, 2021, plus their 10-year success rates as of June…
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How It Happens

THERE’S A SCENE in Three Days of the Condor, that very ’70s, America-in-decline movie, where the CIA is the bad guy and Robert Redford’s character is in danger of imminent extinction. Max von Sydow’s character Joubert—the Alsatian assassin—warns him that he has “not much future.” Then he calmly describes how the CIA will come for him. “It will happen this way,” Joubert says. “You may be walking. Maybe the first sunny day of the spring. And a car will slow beside you, and a door will open, and someone you know, maybe even trust, will get out of the car. And he will smile, a becoming smile. But he will leave open the door of the car and offer to give you a lift.” Let me paraphrase Joubert and tell you from experience how Mr. Market will occasionally come for you and try to kill your financial future. First, the market will fall far enough that investors start to be concerned. Not you necessarily, but some chatter begins. Worries are expressed. Theories are floated explaining why the market is down, and going to fall further.   Today, that might be the inflation narrative. Both stocks and bonds are down in 2022. At one point in January, the S&P 500 was off 10% from its high. But you know that happens to stocks every other year, on average. You buy the dip. Less frequently, the market will fall 15%. Now those predictions of big trouble get louder and more convincing. Still, you’ve seen this before. You buy more. Like Redford’s character—codenamed Condor—you’re still one step ahead. But once in a while, the market will drop 20%, then 30%. And at least once in your investment career, the bottom will seem to fall out. In mine, I’ve lived through: 2000-02, when the…
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Rare Feat

AFTER A 13-YEAR drought, value stocks surged over the past year, and arguably no fund rode the wave better than the venerable Dodge & Cox Stock Fund (symbol: DODGX), which was launched in 1965. Long one of the largest and most respected mutual funds, it’s run by a nine-member investment committee, though the fund is perhaps most associated with Charles Pohl, who has been a manager for 30 years and is set to retire in 2022. Turns out he’s beaten the market the entire time. In an era when we’re used to eye-popping gains, the fund’s 53% return in the year ended Oct. 22 ought to grab attention. That 53% is well ahead of the Vanguard 500 Index Fund (+33%), as well as the huge winners from the past five years, like Invesco QQQ Trust (+32%) and the ARK Innovation ETF (+21%). It’s also ahead of fellow giant value funds Vanguard Windsor (+46%) and Windsor II (+42%). According to a fund report by Morningstar, Pohl and his colleagues stuck with hard-hit energy and financial names through the pandemic bear market and added on weakness, scoring with top holdings like Capital One Financial. Returns cited on Dodge & Cox’s site go back 20 years. The fund beat both the S&P 500 Index and the Russell 1000 Value Index during that time. One publication, citing data from Morningstar Direct that I don’t have access to, says the fund has handily beaten both benchmarks from the time Pohl took over in early 1992 through 2020. Pohl also has managed the equity portion of the Dodge & Cox Balanced Fund during that time. Even the late Jack Bogle, Vanguard Group’s founder and a big proponent of the notion that trying to beat the indexes was futile, said the stock-picking team at Dodge & Cox…
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