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If I Didn’t Index by Jonathan Clements

Jonathan Clements  |  Jun 12, 2025

I’ve owned stock-index funds for more than three decades—and that’s made a huge difference in my financial life. What if index funds didn’t exist? I can think of five key ways my financial life would be worse:
I’d allocate less to stocks. With broad market stock-index funds, I know I’ll get whatever the market delivers. If the alternative was actively managed funds or individual stocks, there would be far more uncertainty—and I’m not sure I’d have the confidence to allocate as big a portion of my portfolio to stocks.

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Commodities vs. Gold

Norman Retzke  |  Jun 11, 2025

“Which Is the Better Inflation Hedge? Both have some merit, but one is better than the other.”
Over at Morningstar Amy Arnott posted a short article to answer the question.
Here’s a part of her analysis:
“As shown in the table below, commodities were more consistent as an inflation hedge. They outpaced inflation in all five of the periods shown, while gold fell behind in two of the five periods. Gold did excel during the two separate inflationary periods in the early and late 1970s…..

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Should we envy the super wealthy? Have they taken our piece of the pie leaving us with the crumbs? Nope! By Dick Quinn

R Quinn  |  Jun 9, 2025

What triggered this post was a Facebook meme claiming the wealthiest 0.1% have gained $4.4 trillion in the past two years, that they have grown their wealth at the expense of average Americans and that “without them your wealth would have doubled”
When I read that, my reaction is “that’s just wrong and so what, they earned it.”  I wish I was that smart. But that is not the typical reaction. Many people readily believe such a meme and are willing to bash the wealthy.

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“Most Revealing Question in Personal Finance”

David Lancaster  |  Jun 4, 2025

I receive Mike Piper’s Oblivious Investor newsletter. Today I saw the above interesting title of an article he linked to
https://www.advisorperspectives.com/articles/2025/05/19/revealing-question-personal-investing-how-warren-buffett-helps-answer
The question was: What is the lowest risk-free, after-tax, after-inflation rate of return you would accept in order to forgo all other investment opportunities for the rest of your life?1
Although the article itself was waaaay too technical for my pion mind, my knee jerk answer was 2%. I’m not greedy.

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What About Gold?

R Quinn  |  Jun 3, 2025

I know nothing about buying gold or in any way holding it in a portfolio. TV is full of ads to buy gold coins. If you buy them, how do you sell them and to who?
Anyone have any words of wisdom about buying gold in any form?
Is gold a viable investment for most people?

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What’s the Best Way to Measure Investment Performance?

Fred Miller  |  Jun 3, 2025

In tracking how your investments are doing, there are several ways to measure performance, but they don’t all tell the same story:

Simple Average Return
CAGR (Compound Annual Growth Rate)
TWR (Time-Weighted Return)
IRR (Internal Rate of Return / Dollar-Weighted Return)

Each method offers something different depending on the context, lump sum vs. ongoing contributions, investor vs. fund manager perspective, etc.
1. Which return metric do you personally rely on most and why (IRR, CAGR, etc.)?

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Cryptocurrency in a 401(k)?

R Quinn  |  May 29, 2025

MarketWatch posted that the Trump administration is rescinding Biden administration’s guidance that discouraged cryptocurrency investing by 401(k) plans.
The 2022 guidance directed plan fiduciaries to exercise “extreme care” before adding cryptocurrency to investment menus. That caution has now been removed.
I’m thinking removing urging “extreme care” for 401k plans is not such a good idea. Is the 401k the place for such an investment?
 How many people actually understand cryptocurrency? Not me 
I can just see some employees (like the ones taking the financial literacy test) jumping on the bandwagon if they have the opportunity.

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I’m Guessing Most HD Readers Will Score 100%

kristinehayes2014  |  May 28, 2025

I found this financial literacy quiz this morning. It comes from the Stanford Center on Longevity. According to the site, only 29% of American adults can correctly answer the three questions in the quiz.
I’m guessing most HumbleDollar readers will Score 100%. I did.
Take the quiz.

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Smart idea or not? Converting Vanguard mutual funds to Vanguard ETFs

Steven Duncan  |  May 12, 2025

It seems that converting my (non-IRA and non-Roth IRA) Vanguard mutual funds to the corresponding  or equivalent ETFs is a smart tax move to make.
However, then I read this in Vanguard’s information about making the conversion.
By making the conversion, I will be giving up the average cost basis of the shares I had purchased years ago, and applying the FIFO (First In First Out) cost basis.
This is what Vanguard says:
“If you are already locked into the average cost method by a sale,

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Go for the Gold?

Adam M. Grossman  |  May 10, 2025

IT’S BEEN QUITE A YEAR for gold investors. While the stock market has struggled, gold hit a new all-time high, topping $3,500 per ounce just a few weeks ago.  Year-to-date, gold has gained nearly 30%, while the S&P 500 is in negative territory. This has certainly grabbed people’s attention—but does gold make sense for your portfolio?
To answer this question, let’s start by looking at the arguments favoring gold. Supporters typically point to two key attributes,

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Tax Efficient Investing for Retirees with High Net Worth: Direct Indexing?

R L  |  May 8, 2025

What would you do?
A recent 60-yr.-old retiree with a pension over $100K/yr. and rental income of ~$30K/yr. My expenses are ~$70K/yr. As you can see I have no need to withdraw any $ from my retirement accounts (~$1.09M in trad. IRA and $2.2K in Roth) or two brokerage accounts ($1.5M-a bunch of mutual funds (18) & $500K- Schwab Intelligent Portfolio-robo advisor; overall asset allocation of 85% stocks & 15% bonds.) Seriously considering doing Roth conversions before reaching RMD at 75.

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Follow up on Dividend Investing

Marjorie Kondrack  |  May 5, 2025

https://www.wsj.com/finance/stocks/dividend-stocks-midcap-recession-protection-e6f33c2d?mod=series_investmonav
The Wall Street Journal today ran this timely article for investors who wish to further explore this strategy.

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Treasuries risk free, Bloomberg says NO!

Scott Dichter  |  May 4, 2025

https://www.advisorperspectives.com/articles/2025/04/23/us-bonds-never-risk-free-never-will
The above article, I believe provides interesting food for thought. It speaks to our latent recency bias, that people often make decisions based on how current things will get projected into the future.
I wonder if things get labeled “risk-free” as a selling point, so that we’ll pay more, own more, beyond it’s real value.
Well it’s got me thinking.

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Suffering in Private

Adam M. Grossman  |  May 3, 2025

ABOUT 10 YEARS AGO, Steve Edmundson, manager of the Nevada state pension, became a folk hero in the investment world when The Wall Street Journal profiled him in an article titled, “What Does Nevada’s $35 Billion Fund Manager Do All Day? Nothing.”
It was an exaggeration to say he did “nothing,” but Edmundson definitely did things differently. Since the 1980s, the trend among pension and endowment managers had been to follow in the footsteps of Yale University’s David Swensen.

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How can we mere mortals figure out stocks, when the “experts” are confused?

R Quinn  |  May 1, 2025

As I have mentioned, stock in my former employer (PEG)  is one of our largest holdings. I have owned it for 50 years or so. It’s recent financial reports were good, but it missed one estimate by one penny.
That range over the last 52 weeks was $68.29 to $96.52. Other than interest rate concerns I have no idea why. Today the price is $78.79.
Then I read this:
News

Evercore ISI Adjusts Price Target on Public Service Enterprise Group to $92 From $99
MT NEWSWIRES
May-01-2025 11:36 a.m.

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