INSURANCE COMPANIES are disproportionately represented among the world’s oldest companies. John Hancock was founded in the 1860s. Cigna dates to the 1700s. Some insurers are even older. Why is that?
In my opinion, it’s because they employ a strategy called asset-liability matching. In simple terms, insurers organize their finances so cash is always available when they need it.
Let’s say each winter typically results in $100 million of auto claims for a particular insurer.
I HAD THE OPPORTUNITY to view Gustav Klimt’s most famous work of art, The Kiss, while visiting Vienna a few years back. It depicts a couple locked in an intimate embrace. It’s an oil painting with a significant amount of gold leaf—quite distinctive.
A few weeks later, I had an opportunity to buy a Klimt. I was in a gallery in Salzburg and came across a drawing of his which was titled Stehender Rückenakt –
YOU MAY BE FAMILIAR with the term ESG. This is an investment approach that—in addition to traditional financial metrics—also weighs environmental, social and corporate governance considerations when picking investments.
ESG isn’t new, but it’s stirred up a fair amount of controversy recently. As an investor, it’s worth understanding what the debate is about and how you might navigate it.
ESG has been around for years, but its popularity has recently hit an inflection point.
I REALIZE THAT MOST HumbleDollar readers share a similar investment philosophy. They believe in market efficiency, keeping expenses low and holding down taxes, all of which leads them to genuflect at the altar of the all-mighty index fund.
Words and phrases such as Robinhood, bitcoin and active management don’t appear often on this site and, when they do, they’re mentioned with disdain. While this may be a good thing in the main,
BEING MECHANICAL and unemotional is a poor way to live life. But when investing, it just might make you richer.
Through this year’s stock market turbulence, I’ve been even keeled. My reaction to the plunging bond market has been more agitated, as I wrote about here and here. The fact is, while I’m convinced the stock market will rebound, I don’t have the same belief in bonds.
Armed with my faith in stocks, I’ve adopted a mechanical approach to investing,
WHEN I WAS LEARNING about investing, dollar-cost averaging was one of the first strategies I read about. Over the years, I’ve come across a number of articles debating the strategy’s virtues, usually comparing it to a onetime lump-sum investment.
Dollar-cost averaging consists of making a series of periodic investments rather than buying all at once. These purchases occur at regular intervals, regardless of the investment’s price that day. Using this strategy, you can purchase more shares when prices are lower.
MONEY MARKET YIELDS are no longer zero. Far from it. With the Federal Reserve raising short-term interest rates by another 0.75 percentage point last week, investors can now park their savings in a safe money-market mutual fund and earn more than 2%.
If you look at Vanguard Federal Money Market Fund (symbol: VFMXX), you won’t see a seven-day SEC yield that’s that high—yet. But give it a few days. Right before the Fed’s move last week,
“REGRETS, I’VE HAD a few. But then again, too few to mention.”
What was true for Frank Sinatra most definitely isn’t true for me. I’ve had more than a few regrets, and I want to mention the most recent one.
Late last year, Mark Cuban offered me $100 in bitcoin to download the Voyager app, deposit $100 and make a $10 trade. For those of you who are lucky enough not to know what Voyager was,
IN AN EARLIER ARTICLE, I noted that my savings journey began in 1960 with a couple of jars of pennies that I started collecting at age five. I was following family ancestor Ben Franklin’s maxim that “a penny saved is a penny earned.”
One of my uncles also had an interest in coin collecting. He and I began to actively search through countless penny rolls to find pennies with dates that we didn’t have.
FRANKLY, I DIDN’T KNOW how wise or prudent our investments are, so I decided to take a closer look.
Turns out my wife and I are fairly well diversified, but is it the right mix? Our investment goals are preservation of capital, generating income and modest growth. To achieve these goals, we have a mix of money market funds, dividend-paying individual stocks, and bond and stock mutual funds—mostly stock-index funds. The stock funds include large-cap and small-cap,
I JUST RECEIVED an email from TD Ameritrade Clearing, Inc., imploring me to “Vote now! KYNDRYL HOLDINGS, INC. Annual Meeting.”
For the few who haven’t read my fascinating earlier article, I will share my heuristic for voting proxies: “yes” to independent chairmen, “no” to classified boards, “no” to options, and then “yes” or “no” to whatever piques my interest.
I’ll usually spend 10 minutes max thoroughly reviewing the issues for the first proxy I receive in the new year.
AS WE WATCH OUR portfolios get pummeled by 2022’s imploding financial markets, this might not seem like the time for self-congratulation. After all, Vanguard Total Stock Market Index ETF (symbol: VTI) is down 19% in 2022, while Vanguard Total Bond Market ETF (BND) has lost almost 11%.
But ponder this: If you’d been less sensible with your money, your results could have been far, far worse. In particular, take a bow if you:
Didn’t buy cryptocurrencies.
IF I SAID YOU COULD corral a yield of almost 12% by holding most of the stocks in the Nasdaq 100 index through an exchange-traded fund (ETF), would you think I’ve been smoking something? Well, you’d be wrong.
Global X Nasdaq 100 Covered Call ETF (symbol: QYLD) has pumped out a humongous dividend for more than 100 consecutive months, ever since its 2013 inception. But first a caveat that many will view as a tragic flaw: QYLD is a pure income investment,
I’M A FAN OF SLANG and newly coined words. Think of all the names for money we’ve had over the years, like cheese, clams and cabbage. New words catch on not only because they allow a new generation to put their stamp on the world, but also the words reflect changing attitudes.
That brings me to “stonks,” the name many millennials use for stocks—and one that reflects a different view of investing. No one’s sure where the word originated.
AS A COLLEGE professor, there are a few times during the year when things quiet down. During these lulls, I take on tasks that have moved to the bottom of the to-do list. The items include things like doctor’s appointments, home repairs and portfolio rebalancing. I can hear my students’ reaction: “But professor, you teach us about investing in companies and you write about investing. Why do you drop your portfolio review to the bottom of the list?” Valid question.