Investing

Since Warren Buffet is considered at the top of investing game, I heeded his advice for  40 years.  No bonds and an Index 500 fund. Guess what folks, I rolled into retirement never looking back.  ROTH’s came on the scene late and didn’t really understand the taxation, oh well, my wife reminds me about RMD’s and taxation,,”such a problem!”

LOOKING FORWARD TO some downtime over the holidays? Below are some favorite new personal finance books and articles to consider for your reading list.
A Richer Retirement by William Bengen – Back in the 1990s, financial planner William Bengen developed what’s come to be known as the 4% rule. It’s a framework to help retirees determine a sustainable portfolio withdrawal rate. This year, Bengen updated and expanded his research. The most compelling addition: Bengen addresses the question of asset allocation.

I WAS HAPPY to read in The Wall Street Journal that 401(k) plans are “minting a generation of moderate millionaires.” I spent the last two decades of my professional life promoting 401(k) plans to workers, so the news felt like validation.
Moderate millionaires were loosely defined as coupon-clippers with seven figures. Sound familiar? It should to many HD readers. At Fidelity, a record 654,000 investors had a million or more in the 401(k) in the third quarter of 2025.

Recently, a younger, intelligent, and well-educated relative approached me with questions about the book Lifecycle Investing by Ian Ayres and Barry Nalebuff. His curiosity piqued my interest, so I decided to read the book myself.
In essence, the book suggests that when you’re young, your future earnings (your “human capital”) are substantial and behave similarly to a bond. To balance your lifetime risk exposure, you could invest heavily in stocks early, even using leverage, and then gradually reduce risk as you age.

I’m planning to rebalance at year-end, and I’m going to do something index purists might consider heresy: deliberately tilt away from the market’s weighting.
Lately, I’ve become increasingly uncomfortable with the portion of my portfolio devoted to the Magnificent Seven tech stocks, currently pushing towards 25%.
The index purist view would say that cap-weighted indices by definition represent the market’s collective wisdom about valuations. When the Magnificent Seven grows to nearly 25% of my developed world tracker,

I see a fair amount about how index funds will ruin the stock market. According to this Wall Street Journal article there is a different and more immediate issue. Seems that there is a drop off in companies raising capital on the open market, instead restricting IPOs or their equivalent to a hand-selected group of insiders. Is this a case for some kind of regulation? Hard to see what kind.

EARLIER THIS WEEK, the Federal Reserve’s Open Market Committee met and decided to lower interest rates by a quarter-point. This immediately sparked a war of words.
At a press conference, Fed chair Jerome Powell took a swipe at the White House, blaming the president’s new tariff policies for an uptick in inflation.
President Trump wasted no time in responding. All year, he has been lobbying Fed officials to move rates lower. And while they have been taking steps in that direction,

I used to think DRIP was something only plumbers worried about. Then I started investing.
Dividend ReInvestment Plans — DRIPs — are a favorite tool among long-term investors. “Always reinvest your dividends,” the logic goes. “Compounding is king.”
For a long time, I agreed completely — and I still do for people who are in the wealth-building stage of life.
But at some point, I stopped using DRIP entirely. Today, every dividend my portfolio generates goes into cash instead of back into the market.

CRITICS OF INDEX FUNDS are pursuing a new line of attack. Passive investing, they argue, is distorting market prices and creating an unhealthy bubble.
To be sure, the market today is expensive. The price-to-earnings (P/E) ratio of the S&P 500 stands at about 22. That’s substantially above its long-term average of about 16. Of more concern, that metric is approaching a level not seen since the market peak in 2000, just before stocks dropped 57%.

I’m gifting a Wall Street Journal article on the share of AI company debt in the bond market. Just as AI is becoming an ever-growing share of the S&P500, it is becoming a bigger share of the bond market. I have already shifted money from the S&P500 to the rest of the market, and to an international fund, now I’m wondering whether I should do the same for bonds.
Since my asset allocation is 50% stocks,

As a younger reader not of traditional retirement age, I am interested in learning more about the financial subscriptions HD readers are willing (or would recommend to others) to pay for such as financial periodicals, journalism, software, etc. For example, I have enjoyed for years Wall Street Journal and some Bloomberg journalism. I didn’t find Kiplinger subscriptions to be of value to me. There have been some discussion threads that mentioned free retirement calculation software that I appreciated.

WHERE YOU PUT your investments can make a huge difference for your after-tax wealth. 
As you know, we have 3 main investment accounts:

Taxable account. A traditional brokerage account where you are taxed every time you dividends or sell investments at a gain.
Tax deferred account. Traditional 401(k), 403(b), and traditional IRAs allow taxes to be deferred to the future. You pay taxes when your investments are withdrawn, and generally come with an immediate tax deduction.

I began contributing to an IRA in the 80s, buying certificates of deposit at the local bank. Pretty soon I began thinking about investments. I knew almost nothing about the stock market, still, I knew I needed to be in it. I remember watching the nightly news, where the anchors always reported what the DOW did that day, never a mention of that other thingy…. What was it called…. The S&P500? 
I started reading up on the stock market,

From Benjamin Graham in 1972: “Any approach to moneymaking in the stock market which can be easily described and followed by a lot of people is by its terms too simple and too easy to last.”
 
Why wouldn’t this apply to indexing?

About  a year and half ago I posted the following article. (It benefited from the wonderful editing of Clements.)  Given investors will soon start receiving distributions from mutual funds, I thought I would repost it. The original post and comments can be found here.
I SOLD A MUTUAL FUND in my taxable account that was up an average 6% a year over the past 10 years—and ended up with a tax loss. That’s right,