Jonathan Clements

IT’S A COMMON PLOY among columnists: You start with the provocative statement—and then spend the rest of the article dancing like crazy, trying to defend it. Today’s provocative statement: Except in a few rare instances, I’m not sure why anybody would ever own municipal bonds.
At first blush, this sounds not just provocative, but downright stupid. If you’re in a high income-tax bracket and investing money through a regular taxable account, it would be foolish to buy taxable bonds and then pay income taxes on the interest you earn.

IF YOU DON’T SAVE diligently, you are highly unlikely to amass a decent-size nest egg. Time to make amends? Here are 10 questions to ponder:

Do you regularly spend more than planned? Try writing down every purchase you make. That’ll tell you where your dollars are going—and make you think twice before spending.
How much of your income goes toward fixed living costs? We’re talking about items such as mortgage or rent, car payments,

VANGUARD GROUP is my favorite fund company—and the place where I now keep all my investment dollars. There’s no mystery why: Among mutual fund companies, Vanguard has long been not only the biggest champion of index funds, but also the firm with the lowest annual fund expenses.
Except that’s no longer the case.
Fidelity Investments, BlackRock’s iShares and Charles Schwab have all muscled onto Vanguard’s turf, offering index funds with lower annual expenses. This is obviously a marketing ploy: By offering cut-rate deals on select index funds,

COULD YOU SQUEEZE more happiness from your dollars? Here are 10 questions to ponder:

Which expenditures from the past year do you remember with a smile? Which prompt a shrug of the shoulders and maybe even a twinge of regret? Use those insights to guide your spending in the year ahead.
Could you commute less? Research tells us that commuting is terrible for happiness. You might move closer to the office or try to work at home a few days each week.

THIS BULL MARKET is more than eight years old, U.S. stocks are undoubtedly expensive and there’s even talk of war. Tempted to sell? Problem is, there was also ample reason to be worried three years ago and yet here we are, with shares both higher and more richly valued.
What to do? I fall back on my standard advice: Forget trying to forecast the market’s short-term direction and instead focus on taking the right amount of risk.

WANT TO MAKE SURE your family is adequately protected against financial disaster? Try grappling with these 10 questions:

What’s the minimum dollar amount you need each month to keep your household running? That’s a useful number to know if you’re forced to slash living costs because, say, you lost your job or you need to cover a large, unexpected medical bill.
How would you cope financially if you were out of work for six months?

WE’RE ALL CONSTRAINED by the income we have and the wealth we’ve either amassed or had handed to us. Result: Those on low incomes struggle to cover daily expenses. The middle class pay for today, while also socking away money for their own future. What about the rich? They often use their wealth not only for themselves, but also to help future generations.
These are, of course, gross generalizations. Some folks on low incomes manage to save surprising sums for their own retirement.

GOT COLLEGE-BOUND kids? Make sure you and your children are on the right track financially—with these 10 questions:

Can you afford to help your kids with college costs? It’s important to talk to your teenagers early on about how much financial assistance you can offer—and that’s doubly true if they’ll need to shoulder much or all of the cost.
Will your family receive needs-based financial aid? Use the EFC calculator at CollegeBoard.org to figure out how much aid you might get.

“STOP PULLING MY leg, Grandpa. You’re kidding, right? Is it really true that people:

used to believe they could beat the market?
paid 2% of assets and 20% of profits to hedge fund managers?
got their stock picks from a guy screaming on the television?
thought cash-value life insurance was a good investment?
believed that brokers would act in their best interest?
studied stock price charts to figure out what would happen next?
bought and sold exchange-traded index funds like crazy?

AS I THINK BACK over the past three decades, I have one overriding investment regret.
No, it has nothing to do with the investments I bought. For much of the past 30 years, I’ve owned a globally diversified portfolio, with 100% in stocks when I was younger and closer to 70% now that I’m in my mid-50s. Initially, I owned actively managed funds and a few individual stocks, but I substituted index funds as they became available,

HOUSING IS THE biggest expense for most American families, typically devouring a third of their budget. Are those dollars getting spent wisely? Here are 10 questions to ask yourself:

Should you buy? If you play around with the mortgage calculator at Bankrate.com, you can figure out how big a mortgage you could support with your monthly rent payments. That will give you a sense for whether homeownership is within reach. Even if it is,

WANT TO EARN THE derision of the so-called smart money? Here are 12 ways to get yourself labeled a financial rube:

Express optimism about the stock market.
Stick with capitalization-weighted total market index funds.
Pay off your mortgage early.
 “Arnott vs. Asness? Missed that one. Was it on pay per view?”
Shun alternative investments.
Buy and hold.
Have no opinion on the economy and market valuations.
Dollar-cost average.
Own a target-date retirement fund.
Never cite Ben Graham,

SAVING ENOUGH FOR retirement, and then turning those savings into a reliable stream of retirement income, together constitute our life’s great financial task. Want to make sure you’re on track? Here are 10 questions to ask:

Are you shortchanging your retirement by devoting too much of your income to other goals? For instance, can you truly afford private school for the kids? Do you really have the financial wherewithal to buy a second home?

IT’S ANECDOTAL evidence, so take it with a grain of salt. Still, I’m once again hearing a dangerous argument—that you should always carry the largest mortgage possible, so you have extra money to stash in stocks.
During the roaring bull market of the late 1990s, and during the booming market for stocks and real estate in 2005 and 2006, readers regularly wrote to me, making the same argument. The strategy isn’t without logic—and it isn’t necessarily a sign that stocks are about to crash.

OVER THE 50 YEARS through year-end 2016, the per-share profits of the S&P 500 companies rose a cumulative 1,604%, equal to 5.8% a year, while inflation ran at 4.1%. If share prices had climbed in lockstep with corporate earnings, $1,000 invested at year-end 1966 would have been worth some $17,000 at year-end 2016. On top of that price appreciation, investors would also have collected dividends.
But in fact, over this 50-year stretch, investors fared far better.