WHEN FOLKS TALK about their best financial decisions, they’ll often mention the investments they bought. But my list is quite different. Here are the five best money moves I’ve made during my dozen years in retirement:
1. Updating my estate plan. When I was my mother’s primary caregiver, she was the major beneficiary of my estate. If something happened to me, I wanted to make sure she could afford the care she needed.
BACK IN NOVEMBER, I wrote about using options to bet that shares of Peloton Interactive would decline. This was my first options trade. I purchased the put option when Peloton was trading in the low $50s. The option cost me $200, and it gave me the right to sell 100 shares at $35 per share in March 2022.
Since then, Peloton’s shares have indeed tumbled. It was recently announced that the stock will be booted from the Nasdaq-100 index,
OVER CHRISTMAS, I got the sort of question I love to answer. My daughter’s thoughtful boyfriend had set aside some money for his niece’s college education. What was the best way to invest it?
I said that we’d paid for much of our children’s education with money invested in 529 college savings plans. The investment gains went untaxed because we’d spent the money on tuition, room and board. On top of that, our 529 contributions were deductible against our state-income tax in Pennsylvania,
LAST WEEK SAW additional gains for value stocks, while shares of once highflying growth companies continued to struggle. Meanwhile, foreign markets again rallied. Vanguard FTSE All-World ex-U.S. ETF (symbol: VEU) rose more than 1% last week, even as Vanguard Total Stock Market ETF (VTI) slipped 0.5%.
Let’s further unpack these trends.
The Nasdaq Composite has endured its worst start to a year since 2009. At the same time, blue chip stocks and some of last year’s losers are suddenly in favor.
CRYPTOCURRENCIES have come under selling pressure over the past few months. That might have some readers thinking about buying the dip in, say, bitcoin or ethereum. Those two cryptos, the largest by market capitalization, are off more than 30% from their all-time highs.
I’ve been dabbling in digital assets, but not in the way you might imagine. I put about 3% of my portfolio into stablecoins. Stablecoins differ from the well-known cryptocurrencies we often hear about.
LET’S START WITH TWO definitions:
Specʹtrum, n. a trade name of Charter Communications used to market avaricious cable television, internet, telephone and wireless services.
Vig’or•ish, n.[via Yid., from R. výigryš, lit., gain, winnings.] interest owed a loan shark in consideration for credit. Abbrev: vig.
I bought a home a few months back and, besides trying to meet the neighbors, I had the pleasure of trying to arrange internet service.
CLUTTER IS DEFINED as “things lying in heaps or crowded confusion.” Its origin as a word dates to the 1570s. More than four centuries later, you might imagine we would have got the problem under control, but it seems not.
I had a friend in high school who lived like a monk. He had nothing on his bedroom dressers except lamps and a record player. I wish I could achieve such a pristine state in my condo.
I DEVOTE A GOOD amount of time to learning, not because I worry about cognitive decline—though that’s a worthy reason—but because I enjoy sampling a host of subjects, everything from meditation to music theories.
Before online courses became popular, my self-directed learning involved watching lecture DVDs. I later discovered many free online offerings from reputed universities, including Stanford, Harvard, Yale, MIT and Princeton.
When the pandemic forced me to spend more time at home,
SELLING COVERED calls can sound like a winning investment strategy, especially to yield-hungry investors frustrated by today’s low interest rates. Wouldn’t you know it? There are exchange-traded funds (ETFs) designed to mimic the strategy.
For background, covered calls are a yield-enhancement play that involve selling call options against stocks that you own. The call option gives you extra income, but—during the life of the option—your gains are capped at the call option’s strike price.
MY FIRST RESOLUTION for 2022 is to clean up my investment portfolio. While my garage and my closets are in good order, I shudder when I review my brokerage account.
Over the years, I’ve accumulated close to 20 mutual funds and exchange-traded funds. Overall, I’ve done well with these investments—most of which are based on stock market indexes—but it’s an unnecessary hodge-podge. By the end of the year, I plan to sell a majority of these positions and consolidate the proceeds in a target-date fund.
MINUTES FROM the latest Federal Open Market Committee (FOMC) meeting, which were released last Wednesday, roiled financial markets. Stocks fell sharply, with both the Nasdaq Composite and Russell 2000 falling more than 3% that day. On the week, the Nasdaq was down 4.5%, the S&P 500 down 1.9% and the Dow Jones Industrial Average 0.3% lower. What did investors read in the minutes that gave them such pause?
For background, FOMC minutes are released three weeks after the meeting itself.
ARE LONG-SUFFERING value investors and those with a large allocation to foreign stocks finally about to get some relief? The new year has seen significant relative strength by both areas of the market. Meanwhile, after peaking in the first half of 2021, highflying small- and mid-cap growth companies continue to get hammered. Mega-cap tech shares have also lately succumbed to selling pressure.
What’s worked thus far in 2022 are the boring old large-cap blue chip names.
TOO MUCH FREE TIME, coupled with easy access to the internet, create a problem for this retiree. I obsessively check my IRA at least once—and often several times—each day.
I retired two years early with an above-average Social Security payment and a decent state pension, but not a whole lot in my IRA, which is my only retirement savings. Experts say I need much more, but a job loss in my late 50s, and the inability to find an equivalent position in my field and at the same pay level,
WHEN I WAS WORKING fulltime, my 401(k) and health savings account contributions were automatically pulled from my biweekly paycheck and dumped into the respective accounts. But when I left the nine-to-five world a year ago, the onus fell on me to invest the profits from my small business. I sent off money to some low-cost funds a few times during 2021, but it wasn’t as regular as it should have been.
My resolution: Make my taxable account investing more automated this year.
LIVING A HEALTHY lifestyle is one of the most important aspects of a happy retirement. It is, alas, also one of the most difficult goals for many of us to achieve. A 2005 Boston College Center for Retirement Research study concluded that health was the second most important factor in determining the happiness of retirees—and those with poor health “experience dramatically lower levels of well-being.”
I stopped working fulltime on March 31, 2017. My health,