Investing

LAST WEEK, OPENAI founder Sam Altman sat down for an interview with venture capitalist Brad Gerstner and Microsoft CEO Satya Nadella. Both are investors in OpenAI, so it seemed like a friendly audience. But Gerstner posed a question that seemed to make Altman uncomfortable.
Since introducing ChatGPT three years ago, OpenAI has posted impressive growth, but Gerstner wondered whether the company was, nonetheless, getting ahead of itself.
“How can a company with $13 billion in revenues make $1.4 trillion of spend commitments?” Gerstner asked.

Goodness. A trillion dollars—$1,000,000,000,000.00 That’s a massive potential compensation package and an awful lot of zeros. I guess if you’re already worth 400 billion, you might as well take a leap of faith and shoot for the stars. I really doubt Elon Musk will hit all the numbers to unlock the full amount. The sales and profit targets seem very ambitious, maybe even beyond Musk’s ability to achieve.
Although I personally think the possible compensation package is an obscene amount of money,

I’m quite engaged with the Humble Dollar community and occasionally post articles on the forum. I’m also a keen reader of personal finance articles and books. Being a former business owner with a nearly 40-year-old degree in business and finance, I’m very interested in commentary and the goings-on in the business and finance world. But here’s the strange thing: I’m not massively engaged with my own retirement portfolio. I hardly ever think of it and rarely check its performance.

In an Oct. 27 Morningstar article “The Case for a ‘Good Enough’ Portfolio,” Christine Benz asks the question, “Are you an optimizer or a satisficer?” [satisfice = satisfy+suffice] Do you continually search for ways to improve your portfolio, or are you happy with good enough? Reasons exist for each; no criticism implied for either.
I’ve been a happy satisficer for decades. I’ve made a few tweaks, mostly to adjust to changing life circumstances.
What about you?

SOME YEARS AGO, the scientist Edward Fredkin identified a quirk of human behavior.
When it comes to making decisions, Fredkin found, we tend to allocate our time inefficiently. Suppose, for example, you’re at the grocery store, looking for something basic like paper towels. In a big supermarket, there might be a dozen or more choices. The result: Because there are so many options, it can be hard to choose among them. In the absence of big differences,

I noticed in one of the responses to a recent article that someone expressed some concern about investing in ETFs as opposed to Mutual Funds.  I thought if might be helpful to talk about this topic.  To help open the discussion here is a link to FINRA’s page on the topic:
https://www.finra.org/investors/insights/etf-vs-mutual-fund
Just one more advantage not mentioned in that summary, is that gifting mutual fund shares is hard to do, whereas gifting ETFs is relatively easy.  

When I started taking QCDs and RMDs, several years ago, I called Vanguard each time. Then, last year, I was able to do the whole thing on the website. Naturally, I expected to be able to do it on the web site again this year.
I started with the QCDs. I found the description of what I was supposed to do after a search on the website. I found the correct location. The options presented bore no relationship to the instructions,

STOCK MARKET INVESTORS are enjoying yet another strong year. The S&P 500 has gained about 14% so far, shrugging off, for the most part, uncertainty over tariffs, interest rates and the latest government shutdown.
Should this worry us?
Since ancient times, soothsayers have been attempting—without luck—to forecast the future. As it relates to investment markets, the frustrating reality is that no one knows what the future will bring. But that doesn’t mean there’s nothing we can do.

ROTH IRA IS A powerful account. It grows tax-free and withdrawals are tax-free during retirement. Roth IRA also has income limits.
For 2025, if you are filing your taxes as single and make less than $150,000 ($236,000 if married filing jointly) of modified adjusted gross income, you can contribute a maximum amount of $7,000.
But if you make $165,000 (single) or $246,000 (married jointly), you are ineligible to contribute to a Roth IRA directly.

In an effort to simplify and consolidate my portfolio, I recently completed what’s known as a Section 351 exchange in a taxable account. This provision of the Internal Revenue Code lets investors transfer assets—such as stocks and securities—to a corporation without recognizing a taxable gain or loss, provided certain conditions are met.
With help from my financial consultant, I exchanged a portfolio of individual stocks in a separately managed account (SMA), held since 2020, for shares in a new exchange-traded fund (ETF).

I was just reading an interview with Christine Benz from Morningstar. She recommends also having a portion of your portfolio allocated to bonds and cash. Here is her rationale:
“I can definitely see investors emphasizing dividend-payers in their equity portfolios, maybe going exclusively with dividend-payers, but I would augment them with some safer investments. Coming back to cash, coming back to a little bit in high-quality bonds.

…you’re protecting yourself in a few key scenarios. One would be that sort of market downturn if stocks are down and you have something else to pull your cash flows from in retirement,

Right now, the bulk of my US stock holdings are in my Rollover IRA, split unequally between VFIAX (Vanguard 500 Index Fund Admiral Shares) and VEXAX (Vanguard Extended Market Index Fund Admiral Shares). The split has become more unequal than I originally intended. I am taking the whole of my RMD from the 500 fund (and investing it in other funds in taxable), but I’ll still need to move money to VEXAX to rebalance. I am wondering whether it wouldn’t be better (it would obviously be simpler) to combine both funds into VTSAX (Vanguard Total Stock Market Index Fund Admiral Shares).

The normal thinking would have us believing that a bubble is a dangerous situation for our retirement accounts. What if I told you that I believe a market bubble makes your portfolio more resilient? Would you believe me?
Everyone fears bubbles. You should harvest them.
Don’t worry, I haven’t lost the plot, let me be clear: I’m being deliberately provocative to make a point about something some investors neglect when things are going splendidly well, disciplined rebalancing.

BARRY RITHOLTZ’S NEW BOOK, How Not to Invest, offers investors a cautionary tale—many of them, in fact.
Ritholtz has been in and around the investment industry for more than 30 years—as a trader, a journalist and, most recently, as cofounder of a wealth management firm. 
In short, he is no stranger to Wall Street. His conclusion? It can be a minefield.
Bad actors like Charles Ponzi and Bernie Madoff are well known.

The information below seems to show that those who are invested in international markets will benefit from the devaluation of the dollar as they have this year. The reason is as the value of international currencies increase relative to the US dollar investments in international holdings increase in value even without future earnings from their sales.
https://www.morningstar.com/markets/will-dollar-keep-falling?utm_source=eloqua&utm_medium=email&utm_campaign=MorningDigest&utm_content=None_68062&utm_id=35352
In the first half of 2025, the US dollar saw its steepest decline in over five decades. The DXY index—which tracks the dollar against major trading partners—fell about 11% from January to June.