I FELL IN LOVE with baseball in 1965. My parents were in the midst of divorcing. I found sanctuary listening to San Francisco Giants’ games on the radio. I put on my batting helmet and pretended I was Willie Mays swinging at every pitch or diving on my bed catching imaginary lines drives. Willie had a magical year and, although the hated Dodgers nosed us out in the end, a lifelong passion was born.

ON THE NEWS the other day, they were discussing technological change. “It happens gradually and then suddenly,” said the guest commentator.
The commentator was borrowing a memorable phrase from a book written almost a century earlier, Ernest Hemingway’s 1926 novel The Sun Also Rises.
“How did you go bankrupt?” Bill asked.
“Two ways,” Mike said. “Gradually and then suddenly.”
Although this fictional conversation refers to financial ruin, “gradually and then suddenly” is also how most financially successful people accumulate wealth.

HEARD OF DIRECT indexing? It’s supposed to be the next big thing in investing. Let me tell you why that isn’t likely.
Direct indexing arose from a shortcoming in the way exchange-traded funds (ETFs) work. Most ETFs mimic a market benchmark such as the S&P 500 or the Russell 2000, and are bought and sold on an exchange like stocks. Their main selling point is that there are no active portfolio managers selecting the securities,

TODAY’S STOCK MARKET reminds me of Charles Dickens’s famous line: “It was the best of times, it was the worst of times….”
It’s the best of times, of course, because the market continues to hit new highs. From a low of 2,237 in March 2020, the S&P 500 has doubled. Over the 10 years through July, the S&P has delivered an average annual return of 15.4%, including dividends, far above the historical average of 10%.

WHEN DESIGNING a portfolio, a critical decision is how to allocate your money across stocks, bonds and other investments. Within stocks, you’ll need to make an additional choice: How to split money between U.S. and international. A quick survey of finance-related websites turns up recommendations of 25% to 40% for an investor’s foreign stock allocation.
While I agree that investors should have a meaningful percentage of their portfolio in overseas stocks, I don’t think investors should lose sleep over whether they’re at the high or low end of this range.

NOW MORE THAN EVER, people are hungry for yield or, failing that, a reliable return that doesn’t hinge on the performance of the stock and bond markets. Those puny money market and “high yield” savings account rates may suffice for your emergency fund. But after factoring in inflation, keeping too much in cash investments is a losing proposition.
Last week, a 50-something neighbor asked me for investment ideas to help him bridge the gap between now and retirement.

IN MY CALLOW YOUTH, I would sometimes travel northeast from Austin, Texas, on Highway 79. It was a peaceful and somewhat lonely drive as I passed through various sleepy little towns, with the railroad track paralleling the highway to my right. The sound of the occasional train whistle was the perfect musical accompaniment.
One of the first towns I’d get to was Rockdale, which was best known for having a big Alcoa aluminum factory.

LIKE MOST READERS of this site, I’m committed to index fund investing. Still, even though I know I’d have little chance of beating the market as a stock-picker, I’m periodically tempted to buy individual stocks. When a former mentor who’s a brilliant strategist joined Moderna in May 2020, I strongly considered buying shares. Given where the economy was at the time, I passed on buying the company’s shares (symbol: MRNA) and stuck to my standard S&P 500-index fund investing.

AS AN INVESTOR, I’d describe myself as a small-cap-value-aholic with a worldly outlook. Right now, I’m betting that one of world’s least loved overseas markets will finally return to favor after decades of disappointment. You can laugh out loud now.
Last year, my investment in U.S. small-cap value stocks was a great play from the March 2020 market bottom through about mid-May of this year. I didn’t catch the market bottom perfectly, but—luckily—I was close.

EARNINGS SEASON is wrapping up on Wall Street. Analysts’ predictions and companies’ profit guidance is a bit of a dog-and-pony show, as HumbleDollar contributor Kyle Mcintosh recently described. Still, there’s some useful information to be gleaned from second-quarter results and from executives’ comments.
In particular, I look forward to the FactSet weekly earnings season update to see which pockets of the stock market have the best and worst figures. According to last Friday’s report,

THE 19TH CENTURY feud between the Hatfields and the McCoys doesn’t hold a candle to the debate between supporters of index funds and supporters of active management.
Those in the index fund camp cite decades of data—going back to the 1930s—to support their view that active management is a fool’s errand. In fact, Standard & Poor’s regularly publishes a study it calls SPIVA, short for S&P Index Versus Active. Each time, analysts there reach the same conclusion—that it’s exceedingly difficult for an actively managed fund to beat its benchmark.

I SUGGESTED a thought experiment in my last blog post—one in which the stock market shut down for six months at the start of the pandemic. I believe it helps explain why financial markets recovered with such a vengeance.
Today, I take a different tack, one based on financial theory. It’s easy to forget that stocks are not pieces of paper (remember stock certificates?) or ticker symbols on a computer screen. Rather, they represent a claim on company profits,