Adam M. Grossman

THE NEIGHBORING TOWNS of Nogales, Arizona, and Nogales, Mexico, figure prominently in the work of Daron Acemoglu and James Robinson, who—together with a colleague—won this year’s Nobel Prize in economics.
In their book Why Nations Fail, Acemoglu and Robinson explain that these two border towns are identical in almost every way—from demographics to geography to climate. But they differ in one key respect: Nogales on the American side of the border is prosperous, while its southern neighbor is not.

FOR YEARS, THERE’S been growing concern about the top-heavy nature of the U.S. market. Today, just 10 stocks account for 35% of the S&P 500’s total value. And while the largest technology stocks—dubbed the Magnificent Seven—have done exceedingly well in recent years, their extreme outperformance is making people nervous.
Observers are comparing today’s market to past periods when certain groups of stocks appeared similarly flawless. Consider the late 1990s, when companies such as General Electric dominated the market.

BENJAMIN GRAHAM was Warren Buffett’s teacher and mentor. He also ran an investment fund that specialized in uncovering demonstrably undervalued stocks.
One day in 1926, Graham was at his desk, reading through a government report on railroads, when he noticed a potentially important footnote. It referenced assets held by a number of oil pipeline companies. But there wasn’t a lot of detail, so Graham boarded a train to Washington and found his way to the Interstate Commerce Commission (ICC),

IS IT WORTH OWNING international stocks? There’s far from universal agreement. The traditional argument for investing outside the U.S. is straightforward: diversification—since domestic and international stocks don’t move in lockstep, and sometimes diverge significantly.
At the same time, however, international stocks have lagged behind their U.S. counterparts for so many years that it’s been trying the patience of even the most tenacious investors. Domestic stocks have outpaced international stocks in eight of the past 10 years.

A RECENTLY RELEASED book titled How to Retire is a goldmine for those in or near retirement. For the book, Christine Benz—Morningstar’s director of personal finance and retirement planning—conducted interviews with 20 experts, covering every aspect of retirement.
The result is a valuable field guide for those tackling life after work. Below are seven insights I found particularly useful.
1. Social connections. When we think about retirement planning, most of us tend to think first about the numbers.

SOME YEARS AGO, an elderly neighbor came to our door, asking for a favor. She was looking for packing tape because she’d sold her television and needed to ship it. She went on to say that the buyer, who she’d found on eBay, was in Nigeria. It was, of course, an obvious scam. But for whatever reason, she couldn’t see it.
Today, scams like this are better known and easier to recognize. But what makes online fraud such a problem is that the crooks are always developing new tricks.

WHY IS IT THAT GREAT companies don’t always make great investments? This is a conundrum that’s long puzzled investors because it so clearly flies in the face of intuition.
Indeed, today’s market leaders—companies like Apple, Amazon and Microsoft—are impressive businesses, and their stocks have delivered equally impressive performance, so much so that they and their peers have been dubbed the “Magnificent Seven.” The others in this group are Google parent Alphabet, Facebook parent Meta,

ABOUT ONCE A WEEK, someone will say to me, “I don’t understand bonds.” Sometimes, they’ll state it in stronger terms: “I don’t like bonds.”
Fundamentally, bonds are just IOUs. If you buy a $1,000 Treasury bond, you’re simply lending the government $1,000. The Treasury will then pay you interest twice a year and return your $1,000 when the bond matures. That part is straightforward. What’s more of a mystery is why we should own bonds and what we should expect from them.

COULD SOMETHING like the Great Depression happen again? During that unpleasant episode, the stock market dropped 90%, unemployment rose to 25% and gross domestic product fell 30%. In making a financial plan, is this a scenario we should worry about?
While no one can predict the future, it’s worth taking a closer look at one key variable: the Federal Reserve. Today, the Fed has a reputation for helping smooth out economic cycles. But those who worry about Depression-like scenarios point out how powerless the Fed was to prevent the collapse that occurred in the 1920s and 30s.

DIVIDENDS ARE a seemingly mundane topic. But like many areas of personal finance, it’s one that still generates debate. The most common question: All else being equal, if one stock pays a dividend and another doesn’t, shouldn’t an investor prefer the one that pays the dividend? We’ll examine this question, and then broaden the lens to look at dividend strategies more generally.
To better understand how dividends work, let’s look at Procter & Gamble.

MONEY MANAGERS Raj Rajaratnam and Joel Greenblatt share a number of similarities. They’re almost exactly the same age. Both received business degrees from the University of Pennsylvania, and both started well-known hedge funds. But the similarities end there.
During the 10 years that Greenblatt operated his fund, Gotham Capital, it delivered returns averaging 50% a year, versus 10% for the S&P 500. Thanks to his success, Greenblatt retired from full-time work in 1994 at age 37.

MARKET OBSERVERS have been predicting a recession for the past two years. Why? They’ve pointed to what’s known as an inverted yield curve, when short-term interest rates are higher than long-term rates. Historically, this has been a bad omen for the economy. The yield curve has been inverted since 2022—and yet, despite that, the economy has remained strong and stock markets have continued to hit new highs.
That all changed on Aug. 2, when a little-known indicator known as the Sahm rule began flashing red.

BONDS MAY NOT BE the most interesting investment, but they generate their fair share of debate. Especially after 2022’s rout, when total-bond market funds dropped 13%, many investors wonder how best to proceed. An open question: Does it make more sense to buy individual bonds or opt for bond funds?
To answer this question, let’s start with a simple example. Suppose you’d invested in Vanguard Group’s total-bond market fund (symbol: BND) on Jan. 1,

AMONG THE FINANCIAL topics grabbing investors’ attention, inflation for many years was near the bottom of the list. In fact, between 2010 and 2019, inflation averaged just 1.8% a year, and the Federal Reserve was looking to lift that rate. Throughout 2019, the Fed lowered its benchmark interest rate multiple times, citing inflation that was running below its preferred level of 2%.

But just a few years later, in the midst of the pandemic, all that changed.

SUPPOSE YOU WANTED to construct as simple an investment portfolio as possible. What would it look like?
Many argue that, for stock market exposure, you could go with a single fund, one that tracks the S&P 500 index. The S&P index offers broad diversification and tax efficiency, plus it includes the largest and most successful companies, making it a popular choice. But it’s not perfect.
The S&P 500, like many market indexes, holds stocks in proportion to their size,