Adam M. Grossman

PERHAPS YOU’VE HEARD the expression, “There’s no free lunch.” The idea is, you usually don’t receive something for nothing. Whether it’s with money or with time and labor, you almost always “pay” one way or another.
It’s an interesting concept—but whoever coined the phrase clearly never looked at the U.S. tax code, which is full of free lunches. Today, we’ll discuss one example, which may be of interest to the charitably inclined.
One of the most talked about changes in the new tax law is a provision that alters how deductions are treated.

UNIVERSITY OF California finance professors Brad Barber and Terrance Odean published a research paper on investor behavior in early 2000. The results weren’t pretty. By their reckoning, individual investors lagged the overall market by an average of almost four percentage points a year. The culprit: the costs involved in trading individual stocks.
It isn’t just individuals who struggle with stock-picking. Professional money managers, on average, also trail behind the overall market. Over the past five years,

ON THE AFTERNOON of Sunday, Sept. 28, 1941, it was cool and damp in Philadelphia. Inside Shibe Park, where the hometown Athletics were suiting up to face the Red Sox, all eyes were on Boston’s 23-year-old slugger, Ted Williams. It was the last day of the regular season, and Williams’s average stood just a hair short of .400, at .39955.
According to baseball’s official rules, this would have rounded up to an even .400 in the record books,

SOMETIMES WE DON’T give kids enough credit. Last week, my first-grader reminded me of this fact. On a trip to CVS, he was looking through the drink cooler, when he asked, “What’s Smartwater?” Before I could answer, he started with his own commentary. Seeing the price tag—which was more than double that of the regular water next to it—he wondered, “Why’s it smart? It’s just water. Is it really going to make me smart?”
This made me realize something: As consumers,

THERE’S A NEW TYPE of financial fraud on the rise: tax refund theft. All an identify thief needs are an individual’s name and Social Security number. This information, unfortunately, is readily available. In a single incident in 2017, thieves stole information on almost half of all Americans from credit reporting agency Equifax.
Using this information, thieves then prepare and file a fake tax return in such a way that it appears a large refund is due.

“IN THIS WORLD,” Ben Franklin famously once wrote, “nothing can be said to be certain, except death and taxes.” But I would also argue that neither is completely out of our hands.
When it comes to our health, we all know that we should exercise, eat right and go for regular checkups. And when it comes to our tax bill, there’s quite a bit we can do to minimize it, especially in retirement. Below,

IN AUGUST 2004, venture capitalist Peter Thiel sat down to listen to a pitch from a 20-year-old entrepreneur named Mark Zuckerberg. It didn’t take long for Thiel to make up his mind. According to most accounts, they met in the morning and, after a short break for lunch, Thiel committed to buying 10% of Zuckerberg’s new company, Facebook.
In hindsight, this was clearly a smart move, making Thiel a billionaire. But while it was certainly a great investment,

I LOVE THE QUESTIONS that kids ask. This week, my first grader told me he had heard the word “caricature” and wanted to know what it meant. I explained it and then we went online to see some examples. In our highly politicized culture, we didn’t have to look far to see some exaggerated cartoon depictions of various political leaders.
It occurred to me, though, that our posture toward investments isn’t all that different.

WARREN BUFFETT ONCE quipped that, “You only find out who is swimming naked when the tide goes out.”
I’ve been thinking about this idea over the past two weeks, as markets around the world have given up all their year-to-date gains and then some. Since peaking on Jan. 26, the U.S. market, as measured by the S&P 500, has lost 8.8% of its value.
When the tide goes out like this, the emotional impact can be powerful—and the headlines just make it worse.

TED BENNA, INVENTOR of the 401(k) retirement plan, famously once stated that the system he created should be “blown up.” Why? It isn’t the fundamental structure, which he still believes in. What he doesn’t like is the complexity and costs that characterize today’s typical 401(k).
The original 401(k)s, he likes to point out, had just two fund options. Today, it’s more like 20. Because of that, it’s all too easy for bad investments and high fees to sneak in.

A YOUNG GRADUATE student named Harry Markowitz wrote a paper in 1952 that sought to prove, mathematically, the old maxim “don’t put all your eggs in one basket.” Through his work, Markowitz taught investors how to diversify their investments effectively, something that was not well understood at the time.
For instance, he explained that the number of stocks you hold is far less important than the number of types of stocks you own.

A FEW YEARS BACK, a fellow named Wylie Tollette faced uncomfortable questions as he sat before the public oversight committee of the California Public Employees Retirement System (CalPERS). Tollette, the pension fund’s Chief Operating Investment Officer, was responsible for updating the committee on the status of its massive $350 billion portfolio.
But when a committee member asked about the fees CalPERS was paying to a particular group of investment managers, Tollette did not have a ready answer.

THE STOCK MARKET had a great 2017, gaining more than 20%. But was that kind of gain justified—or should it worry us, especially after the market had already tripled in recent years? I think it’s useful to understand the range of viewpoints, so we’re better prepared for 2018 and beyond. Here are the bull and bear cases:
Bull Case. As measured by the S&P 500 index, the U.S. market gained nearly 22% last year.

AT SEVEN O’CLOCK THIS morning, as my wife and I tried in vain to wake our children for school, we heard a similar response as we went from room to room: “My head hurts.” Nobody wanted to get up.
I have to say, I don’t blame them. It’s the middle of winter here in Boston. The sky is gray and the thermometer seems stuck below zero. It can be hard for anyone to feel motivated,

IN A CLASSIC EPISODE of the sitcom 30 Rock, Tina Fey’s character, Liz Lemon, muses about the size of her nest egg: “I have money saved. Two years. Maybe four, if I cancel cable.”
Not worried about the size of your cable bill? In all likelihood, you’re fretting about one aspect of your financial life—and probably more than one. You might be wrestling with housing costs, student loans, the cost of putting your own children through school,