ON SEPT. 11, 2001, I spent an hour and a half standing on a crowded subway train two blocks from the World Trade Center. During that time, both towers collapsed. No smoke came shooting down the subway tunnel. The earth didn’t noticeably shake. There were no deafening noises. Instead, we were just another subway car packed with disgruntled passengers, muttering about the perils of public transport.
It was only when the train backed up to Penn Station in midtown Manhattan that we learned what had happened that day.

FROM THE TIME I started covering Washington as a reporter in 1980, politicians have been condemning the federal budget deficit. Ronald Reagan was running for president that year. He excoriated his opponent, President Jimmy Carter, for increasing the federal debt by—brace yourself—$55 billion in 1979. These days, that wouldn’t pay a week’s bar tab for Uncle Sam.
With the sole exception of Bill Clinton, every president for 40 years has added to the federal debt,

U.S. AND FOREIGN STOCKS are highly correlated, with monthly returns that move in the same direction almost all the time. Because of this, some have argued that there’s scant reason to diversify internationally.
But there’s a small problem with this argument: Just because investments move in the same direction doesn’t mean they generate the same return. For proof, consider the past 20 calendar years.
Over that stretch, there were only three years when U.S.

ALL EYES ON FRIDAY were focused on Federal Reserve Chair Jerome Powell. “Will Powell announce an aggressive taper plan?” many market-watchers wondered. Not a whole lot new was presented, and that triggered a stock market rally. The S&P 500 notched its 52nd all-time high of 2021 and the Russell 2000 small-cap index had one of its best days of the year.
Small caps got off to a hot start in 2021. By mid-March, the Russell 2000 was up 19% on the year,

ON AUG. 15, 1971, President Richard Nixon made the weighty decision to end the convertibility of the U.S. dollar into gold. By doing so, he drove a stake through the heart of the gold standard, a monetary system which fixed the worth of a unit of money to a specific amount of physical gold. Before that day, foreign central banks were able to exchange $35 for one ounce of gold from the vaults of the U.S.

THERE’S A LOT of handwringing right now about U.S. stock market valuations. Prof. Robert Shiller’s cyclically adjusted price-earnings ratio, or CAPE, has rarely been more famous—or perhaps infamous. It’s currently perched near 39, meaning buyers of the S&P 500 are paying almost 39 times average inflation-adjusted corporate earnings for the past 10 years. That number might mean little to many without proper context. It was around five at the worst of the Great Depression,

BANK OF AMERICA’S monthly fund manager survey takes the pulse of portfolio managers around the world. The latest survey was released last week—and some of the results weren’t so rosy.
Despite a record-breaking quarter for corporate profits, which blew past analysts’ predictions, money managers have turned more bearish. Perhaps recent market volatility, especially among foreign stocks, has caused jitters. Also casting an ominous cloud is the Delta variant’s global spread. On top of that,

REMEMBER 2020’S BIG market swings? Financial markets have been more boring of late. But are things too quiet?
The VIX is the most  commonly cited indicator of market volatility. Turn on CNBC or flip through The Wall Street Journal and you’ll likely learn the latest reading for the “fear gauge.” Last Friday’s close was among the lowest of the year, with the VIX at a little more than 15, versus an historical average closer to 20.

MONEY MANAGER GMO recently noted that, “There are no bad assets just bad prices.” The occasion was the S&P 500’s price outrunning earnings by 70% over the seven years through March. GMO’s punchline: The same thing happened in the seven years that ended with the dot-com peak in March 2000. This, of course, did not end well.
Two decades ago, I remember a friend telling me of steep losses in his retirement savings, the result of moving his entire 401(k) into aggressive,

FINANCE NERD THAT I am, I gleefully dug into the 2021 Capital Markets Fact Book that was just published by SIFMA. I was particularly humbled by a chart showing the breakdown of the global stock and bond markets. Why humbled? The data show just how great we U.S. investors have had it in the past decade.
The Fact Book first displays the $58 trillion global stock market’s composition in 2010.

THE MOST FAMOUS market-timing (mis)statement may be that of Irving Fisher, who—as a result—ultimately suffered a fate similar to that of President Herbert Hoover. Both men are inextricably linked to the Great Depression, despite a lifetime of achievement and their positive work to improve the lives of humans everywhere. Fisher, whose theories on capital, interest rates and lifecycle investing are still relied on by economists today, will likely continue to be remembered for his statement nine days before the 1929 market crash that,

THE RAGING DEBATE of 2021 is whether the inflation we’ve been experiencing this year will be transitory or more permanent. The Federal Reserve’s official stance is that the spike in inflation is a perfect storm of pent-up demand, supply-chain disruptions and year-over-year comparisons that are “inflated” relative to 2020’s pandemic-induced deflation, and eventually will revert to more normal levels.
Recent hotter than expected inflation data—including the consumer price index (CPI), producer price index (PPI),

JULY WAS ANOTHER positive month for U.S. stocks, which gained 1.7%. But overseas markets were down 1.4%, with emerging markets faring even worse, tumbling 5.9%.
Last week, the Chinese government clamped down on its education and technology industries, sparking a sharp selloff. The return of Vanguard FTSE Emerging Markets ETF (symbol: VWO), which is 40% Chinese stocks, briefly turned negative for the year, while U.S. stocks continue to sport year-to-date gains of more than 15%.

ARE THERE TIMES when a near 100% international stock allocation makes sense? I believe there are—and that today is just such a moment.
Never in my life have I had such a low allocation to U.S. stocks. My overall portfolio is 60% stocks and 40% bonds. But the stock portion is comprised of just 15% U.S., with the remainder held in international stocks, split evenly between emerging and developed markets.
I realize that’s unorthodox.

I HAVE TO ADMIT IT, I’m one of those guys who likes to hide money. I have cash hidden in a couple of places in my house and even in the garage. And I’m not talking about a few dollars. I probably have more than $3,000 in denominations large and small tucked in envelopes. I also have a jar of coins.
You might ask, “Why in the world would someone have so much cash lying around the house?” I keep it on hand in case of an emergency.