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Setting Boundaries

Marc Bisbal Arias  |  May 11, 2020

HOW MANY TIMES have you found yourself doing things you don’t want to be doing? It might be binge-watching Netflix, eating junk food or mindlessly scrolling through your favorite app. This is something we all struggle with.
Investing is no different. The behaviors we should avoid are mostly clear, but it isn’t always easy to follow through.
I remember vividly the day I joined my first employer, Chicago-based investment researcher Morningstar, as an intern a few years ago.

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Thinking It Through

Adam M. Grossman  |  May 10, 2020

ON JAN. 10, 2000, America Online co-founder Steve Case stood on stage in New York to announce the largest corporate takeover in American history, buying venerable Time Warner for $165 billion. At the time, commentators called it the merger of the century. But just five years later, Case acknowledged that it was actually “the worst merger in history” and argued that it was time “to take it apart.”
Making financial decisions is difficult even in good times.

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No Alternative

Jonathan Clements  |  May 9, 2020

IT’S A SCARY TIME to own stocks. But for long-term investors who want their portfolio to clock significant gains, there’s simply no alternative.
To be sure, you could throw in your lot with the market-timing crowd, who are currently hiding out in bonds and cash investments. Their plan: When we get the final climactic plunge in share prices that sends the market back to valuations not seen in four decades, they’ll swap into stocks and ride the next bull market to astonishing wealth.

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Battle Over Benefits

Richard Quinn  |  May 8, 2020

ALMOST EVERYBODY collects Social Security at some point in their life. But it seems like that’s the only thing we all have in common.
Why are there such stark differences of opinion regarding Social Security’s purpose and effectiveness? Why are so many Americans willing to believe that one administration or another stole the Social Security trust fund? Why is any effort to modify the program for future retirees immediately denounced as a cut in benefits?

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Working the Rules

Peter Mallouk  |  May 7, 2020

IT’S YEARS LIKE THIS that can greatly improve our chances of a comfortable retirement—if we play our cards right. Indeed, thanks to recent rule changes enacted in Washington, there’s a slew of ways to bolster our finances.
What steps should you be taking? Here are seven things to do—and not do—with your retirement accounts right now:
1. Don’t take your RMD. As part of this year’s CARES Act relief package, individuals don’t have to take required minimum distributions (RMDs) from their IRAs or employer-sponsored retirement plans.

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Playing the Odds

Jonathan Clements  |  May 6, 2020

ON WALL STREET, there’s a story—apocryphal, I suspect—that’s told about an old trader, a young trader and the 1962 Cuban missile crisis.
Old trader: “They say this could lead to nuclear war.”
Young trader: “So we should buy bonds, right?”
Old trader: “No, we should buy stocks. If we don’t get war, the stock market will rally. And if we get a nuclear war, it won’t matter what we own.”
Today’s pandemic won’t lead to nuclear war (except perhaps in the Oliver Stone movie version).

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Retire That Policy?

Dennis Ho  |  May 6, 2020

FOR MOST PEOPLE, life insurance is purchased to protect their income in the event of an unexpected death. If you’re 35 years old, you potentially have 30 or more years of future earnings that your family would lose if you passed away, so having life insurance during these working years makes sense. But what happens once you reach retirement? Before canceling your policy, it’s important to assess your situation, because keeping the coverage might be the better choice.

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Anybody’s Guess

Dennis Friedman  |  May 5, 2020

IT’S OFTEN DIFFICULT to fathom what causes the stock market to rise or fall. The market doesn’t always reflect how the economy is currently performing—and sometimes the disconnect can seem huge.
This sentiment was captured in a recent MarketWatch headline: “‘The world is more screwed up’ than the stock market is currently reflecting, warns billionaire investor.” The article was reporting on comments made by Oaktree Capital founder Howard Marks, who told CNBC, “We’re only down 15% from the all-time high of Feb.

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Side Effects

Richard Quinn  |  May 4, 2020

BEING CONFINED to home—except for trips to the grocery store for “necessities”—is changing me. My frugality has evaporated, my prudent buying habits destroyed, my healthy eating falling by the wayside. What’s happening?
No doubt there is a diagnosis, but in simple terms it’s called stir-crazy—and I’ve got it bad.
I’ve made two trips to the supermarket in the past two weeks. I had a shopping list. But as a result of my affliction, I instead roamed the aisles,

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Filling the Gap

James McGlynn  |  May 4, 2020

REACHING AGE 65 is a financial relief for many folks—because they’re finally eligible for Medicare. But then disappointment often sets in.
Why? Medicare might cover just 80% of medical expenses, leaving the patient to handle the other 20%. How will you cover that 20%? The usual solution is to buy a Medigap policy. But there are so many choices that it can be overwhelming.
My goal today: Help you narrow that choice a little—by comparing two Medigap plans,

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Regrettable Behavior

Adam M. Grossman  |  May 3, 2020

INVESTORS, it’s often said, are driven by fear and greed. But I’d add a third item to the list: regret.
The past year and a half have been enough of a rollercoaster to rattle even the most even-keeled investor, creating ample opportunity for regret. Since the fall of 2018, the stock market has dropped 20%, gained 30%, dropped 35% and then gained 30% again. Result? Here are some of the sentiments I’ve been hearing over the past month:

“Why didn’t I sell at the top?”
“Why didn’t I buy at the bottom?”
“Why did I bother with international stocks?”
“Why did I buy high-yield bonds?”
“For the love of God,

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We Need to Talk

Jonathan Clements  |  May 2, 2020

WE’RE IN THE MIDST of a bull market—in talking. Stuck at home with our families, we’re chatting more with each other, while also frequently touching base with friends and family whom we can’t see in person.
How about devoting some of these conversations to money?
I’m not going to claim that, if we had more frank discussions about money, it would solve all of our financial problems. I’ve seen enough damning data and heard enough horror stories to know that many folks will make huge blunders,

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Feelin’ Groovy

Sanjib Saha  |  April 30, 2020

I’VE BEEN WORKING from home for nearly two months. Many friends and coworkers are tired of the lockdown. I seem to be an oddball: I feel happier and less stressed.
I’m not oblivious to the reality of today’s pandemic. As I write this, my uncle abroad is facing a hard time getting urgent medical care. Millions of others across the globe are also suffering.
Against such a gloomy backdrop, I feel almost guilty in seeing a positive side to the lockdown.

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From Two to One

Catherine Horiuchi  |  April 30, 2020

FOLLOWING MY husband’s death, I went from feeling prosperous to precarious in the space of a few short months. For decades, I’d had something extra in hand, beyond the minimum sum necessary to keep going. That sense of prosperity was now gone.
This wasn’t just my imagination. Studies have found that widows are significantly less wealthy than their married counterparts. One academic article notes, “The death of a spouse is an event that may precipitate a large decline in wealth.” Similarly,

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Taking the Hit

Richard Connor  |  April 29, 2020

ONE OF MY GOALS for 2020: develop a plan for doing Roth IRA conversions over the next 10 years. Once the money is out of traditional IRAs and in a Roth, it’ll grow tax-free. Problem is, the conversion means taking a tax hit today.
So why am I interested? There are several reasons: lowering lifetime taxes for my wife and me, creating the flexibility to manage future tax bills and leaving a tax-free inheritance to our children.

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