Investing

Nice! On top of other recent gains, the only individual stock I owned was up two days in a row and had reached the sell price I had in mind for months. Shortly before the market closed on Friday, I logged in to E*TRADE and stepped off the rollercoaster ride once and for all.
The sale came almost 17 years to the day that I first purchased that company stock via an employee stock purchase program (ESPP).

In a previous post I recounted how luck and stupidity kickstarted my retirement savings journey, but I glossed over one important detail: the cost.
In the mid-eighties, high-fee front-loading was standard practice, and these products were typically sold by people whose entire compensation depended on shifting them. The pressure to sell was enormous, and the salespeople were good at their jobs.
My twenty-year-old self walked straight into one of them. He was slick, he was persuasive,

THE INVESTMENT WORLD is full of storytellers. And while these folks might be entertaining, they generally aren’t very helpful. There’s one category of stories, however, that I do think is useful: They’re what I might call investment fables. They’re apocryphal stories that likely aren’t real. But they’re helpful nonetheless because each carries a useful lesson. Here are some of the more popular ones.
Consumer choice. In 1999, Richard Mille and a partner launched a company to make wristwatches.

I recently received an email from Vanguard informing me they’re updating the prospectus on a developed world fund I hold with them. The change relates to concentration limits. Under existing European regulation, no single company can normally represent more than 10% of a fund. However, there is a pre-existing exemption available to index-tracking funds that allows this ceiling to be raised to 20%. Vanguard are now choosing to apply that exemption.
Here’s what caught my attention: no company has actually hit that 10% threshold yet.

I used AI as an editorial assistant to help organize and refine my thoughts; the underlying ideas and personal experiences remain my own.
Rebalancing sounds simple. Pick your target allocation and, whenever a holding drifts too far, trade back to target.
That’s how I thought about it as I started managing my risk portfolio. The problem was that I never stopped to ask what “too far” meant. I found myself reacting to routine market movements that had little effect on my long-term plan.

My great aunt survived the San Francisco earthquake of 1906 with nothing. We know this because she wrote a letter to my grandmother in Kansas asking her to sell the property they had inherited together. She and Billy had nothing left. Nothing at all. A Union soldier — that is how she described him in the letter — handed her a pair of long johns. That was what she had to wear.
She and her husband William F.

Here’s something I’m debating and hoping the collective brain trust of the HD community can push me in the right direction.
As a retired Fed, I have access to the Thrift Saving Plan G Fund.  For those not familiar, it’s basically a high yield savings account on steroids.  It pays rates comparable to medium/long-term Treasuries but has no default risk, duration risk, or interest rate risk.  It only pays interest and can never fall in value. 

THE WAY INVESTORS think about the stock market may be entirely wrong.
Intuition tells us, and academic research confirms, that a company’s stock price should respond to important news and information. When a company announces a new product, for example, its stock should go up. And when results fall short of expectations, it should decline. 
But a new paper titled “The Inefficient Pricing of News” calls this idea into question. The authors found that investors respond much more slowly and inconsistently to market news than previously thought.

EARLIER THIS SPRING, Emil Verner, an economist at MIT, made an observation: The stock market, he said, seemed to be exhibiting “excess tranquility.” Despite an ongoing war, inflation and other negative headlines, investors seemed surprisingly unfazed. The market was on track for its fourth year in a row of positive returns. Through May, it had gained 11%.
But no sooner did Verner make this observation that the market did begin to wobble. Last Friday,

I know the HD readers have much in common. I’m interested to find out about our diversity.
What I’m interested in, is not the size of anyone’s portfolio, but it’s contents.
If your portfolio is a thousand, a million, or even multi millions doesn’t matter…. What is it invested in and it’s percentages.
As an example I would answer this inquiry I know that basically VUG and VTV are VOO (V Vanguard S&P 500). My wife who doesn’t really understand etf’s said it’s always done so well we should keep it.

Bonds vs. Bond Funds
A friend of mine was shocked when his “safe” bond fund fell in value as rates shot up after the Fed raised interest rates. He had to delay buying the new car. The fund wasn’t as safe as he thought. The value of his investment depended on future interest rates and on when he needed the money. Many investors do not really understand the main difference between bonds and bond funds.
Bonds mature.

Morningstar posted an article by Allan Roth (an investment writer just in the past year) this morning.
He writes the delaying Social Security until 70 and buying a US Treasury TIPS ladder are risk free inflation adjusted alternatives to purchasing an annuity through an insurance company who’s payments generally are not..
https://www.morningstar.com/funds/hidden-risks-income-life-target-date-funds?utm_source=eloqua&utm_medium=email&utm_campaign=MorningDigest&utm_content=None_75089&MorningDigestUS&utm_id=39201
Enjoy

Recently “core” and “core-plus” actively managed total bond ETFs have become available.  A Wall Street Journal “Not All Total Bond Market ETFs Are the Same…” makes many interesting points about managed total bond ETFs, including the point that they have higher returns than index total bond ETFs. Owning only one total bond ETF that returns more than the index makes for an uncomplicated and appealing portfolio.  If you want the simplicity of owning only one bond ETF rather than actual bonds or multiple bond ETFs that yield more than the index,

If you’re inclined to create a spreadsheet — and I know that some of you are and some of you aren’t — you can put that spreadsheet directly into an AI program and ask it to analyze what you own. What happens next might surprise you.
Setting Up Your Spreadsheet
Your spreadsheet doesn’t need to be complicated. At minimum, include these columns:

Ticker — the symbol for each holding
Shares — how many you own
Cost per share — your purchase price,

I WAS RECENTLY asked about strategies that high earners can use to reduce their tax bill.
Most people know the usual options. They contribute to a 401(k), fund a health savings account or make a Roth IRA contribution through the backdoor method. Business owners may have additional opportunities through retirement plans and business structures.
But there’s another strategy worth knowing about: the Mega Backdoor Roth (MBDR).
The MBDR allows some workers to put far more money into Roth accounts than the usual contribution limits permit.