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Time to Retire

Brian White  |  September 29, 2020

IN SUMMER 2012, my boss of 17 years announced he planned to retire the following year. I had enjoyed working for him and considered him both a mentor and a friend, and I had some trepidation about working for a new manager at this late stage in my career. While I enjoyed my job and was good at it, and I liked most of the people I worked with, it was a stressful, demanding position,

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True Wealth

Joe Kesler  |  September 28, 2020

YOU NO DOUBT remember Peter Lynch, the celebrated manager of Fidelity Magellan Fund. He quit Magellan’s helm when he was just 46 years old. His comment at the time: “You remind yourself that nobody on his deathbed ever said, ‘I wish I’d spent more time at the office’.”
Nothing brings more clarity to money’s limitations than consideration of our mortality. A few weeks ago, I thought about this truth as I lay awake all night,

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High Anxiety

Adam M. Grossman  |  September 27, 2020

DO ELECTIONS affect the stock market? Last week, I cited an analysis by Vanguard Group that attempted to answer this question. The study’s verdict: “It’s understandable to have concerns about the election. But as far as your portfolio and the markets are concerned, history suggests it will be a nonissue.” Specifically, Vanguard’s analysis cited evidence that investment returns are no different in election years than in non-election years.
I agree with Vanguard’s overall recommendation—to stay the course with your financial plan.

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Seems So Easy

Jonathan Clements  |  September 26, 2020

MANAGING MONEY is ridiculously simple—and unbelievably hard.
Figuring out what we should do with our dollars is typically straightforward: We should save regularly, diversify broadly, rebalance occasionally and so on. Instead, the tough part is getting ourselves to do what we intellectually know is right.
Take the notion of buying low and selling high. Every investor knows that’s the goal—and yet, when the S&P 500 slumped 34% earlier this year, many folks just couldn’t bring themselves to buy stocks.

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Back When

James McGlynn  |  September 25, 2020

I BEGAN MY CAREER in investments as a junior analyst at a public endowment fund. It was 1980 and I’d just finished my last investment class at college, where I learned about Modern Portfolio Theory. Why, decades later, is it still called “Modern”?
The Dow Jones Industrial Average was below 1000, versus today’s 27000. Men wore suits in 100-degree Texas heat. We had individual offices. We researched companies by reading brokerage reports, talking to brokers and requesting annual reports from companies.

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Leaving Early

Catherine Horiuchi  |  September 24, 2020

LIKE OTHERS, I took my first part-time job as a teenager and, once working fulltime, stayed at it steadily for decades. Being an adult meant being a worker, affiliated with some firm or another, one industry or another.
My plans for ever exiting the labor force were vague: “Save for the future, so someday you will retire with honor and dignity to spend your waning days as you desire.” I saved steadily, putting me on track for future retirement.

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Saved by a Crash

Andrew Forsythe  |  September 23, 2020

THIS IS THE STORY of a bitter life lesson that taught me two things: the desirability of managing my own investments and the perils of putting almost all my eggs in one basket.
In the late 1980s—and early in our marriage—my wife and I were busy raising four kids, while also managing two demanding careers. Our dream was to build a beautiful house on a large wooded lot that we owned in the hills west of Austin,

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Limited Selection

Brian White  |  September 22, 2020

BY EARLY 2009, I had been investing for 22 years. My wife had invested for a bit longer, and our savings were starting to seem like a significant chunk of money. I was reasonably happy with our investments. Still, I knew that—for those 22 years—we had been paying too much in investment expenses, thanks to the high-fee funds in our employer-sponsored retirement accounts.
Another source of frustration was that our money was spread over seven financial accounts and 14 mutual funds.

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Staying in Bounds

Rich Chambers  |  September 21, 2020

INVESTING IS ALL about picking the “best” investments—or so I thought. It took a lot of years to realize that this was the wrong focus. Instead, selecting a portfolio of good, reliable investments and sticking with them is what really worked for me and for my clients.
Sound simple? It can be—but the maintenance is surprisingly hard. We’re talking here about periodic rebalancing. That involves setting target percentages for a portfolio’s various investments and then occasionally buying and selling,

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When to Change

Adam M. Grossman  |  September 20, 2020

IN THE BOOK OF JOAN, a tribute to the comedian Joan Rivers, her daughter Melissa shares some of her late mother’s quirks. Among them: Her mother always drove 40 miles per hour. Regardless of where she was—on the highway, in a school zone, in the driveway—she always drove 40 miles per hour. Melissa’s conclusion: For passengers, this could be hair-raising, but at least her mother was consistent.
When it comes to investing,

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My Regrets

Jonathan Clements  |  September 19, 2020

EVERY SO OFTEN, I’m asked about my biggest investment mistakes—and I really don’t have much to say. Yes, like many others, I dabbled in individual stocks and actively managed mutual funds early in my investing career. Yes, like everybody who’s truly diversified, there are always parts of my portfolio that are generating disappointing short-term results. But such things don’t cause me any regrets.
Instead, as I look back, my big financial regrets fall into four buckets:
Pound foolish.

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A Combustible Mix

Tom Sedoric  |  September 18, 2020

THERE’S NO SUBJECT that gets me more worked up than market volatility—and especially the danger posed by high-frequency trading (HFT). Volatility has become part of the “new normal,” thanks to fundamental changes in how the market operates.
Remember the flash crash of 2010? I haven’t forgotten the unsettling events of May 6, 2010, when the Dow Jones Industrial Average dropped 600 points in just five minutes. For a few minutes, starting around 2:45 p.m.,

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Want $870,000?

Richard Quinn  |  September 17, 2020

SENTENCES THAT begin with “I can’t” drive me nuts—and I especially dislike the sentence, “I can’t save.”
“Pish-tosh,” I say.  Every household in America earning at least the median income can save for the future. If they try hard, many lower-income Americans could also save.
Of course, the amount saved will vary, but even small amounts can help over the long haul. If a household earning $40,000 a year can sock away enough to generate $300 or $400 in monthly retirement income to supplement whatever they get from Social Security,

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It Sure Adds Up

Dennis Friedman  |  September 16, 2020

MY FINANCIAL advisor has been on a mission to reduce my investment costs. He’s been replacing my low-cost, broad-based index mutual funds with the exchange-traded fund (ETF) version. He believes this will improve my investment returns over the long run.
For instance, if you own Vanguard Total International Stock Index Fund—a mutual fund—you’re currently paying 0.11% in annual expenses. But Vanguard’s ETF alternative charges just 0.08%, equal to a savings of three cents a year for every $100 invested.

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Fatten That Policy

James McGlynn  |  September 15, 2020

I WORKED in the investment department of three different insurance companies. But I never had any interest in buying a whole-life insurance policy. I knew term insurance was the best way to get the maximum death benefit for my premium dollars.
Instead, as a mutual fund manager, I was always more interested in investing in the stock market. (That said, I didn’t invest in the first mutual fund I managed. Why not? I didn’t want to pay the 7% “load”—the upfront sales commission.)
But my attitude toward whole-life insurance changed six years ago.

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