Investment Planning
Dwindling Dividends
There is no shortage of online articles promising great success for retirees who buy into stocks and live off the dividends. However, there is often little, or no, historical information provided.
Consider this – in 1873, a basket of large-cap stocks (like the S&P 500) paid a dividend yield of 7.5%. Receiving $7.5 […]
Global Stock Market Valuations
A common measure of stock market valuation is the price / earnings (P/E) ratio. The calculation takes a company’s price and divides it by its earnings per share. The resulting ratio can be compared throughout history or to other countries.
As of December 31, the P/E ratio of large U.S. stocks (using […]
Investments for the Long Run
A common tool used by financial advisors is something called the Callan Periodic Table of Investment Returns. As you can see from the following chart, the rank order of different asset classes (color coded; top is highest performers, lowest is worst returns), is generally random.
See for yourself whether you can discern any pattern. […]
ESG Investing
An increasing number of investors considering the social impact of their investment dollars – for a variety of reasons. Some investors want to avoid supporting companies or industries which, in their opinion, are not making the world a better place — such as weapons manufacturers, tobacco companies, or firms that have a track record […]
Declining Mutual Fund / ETF Fees
Many investors never see or pay attention to the expense ratios of their mutual funds and ETFs. However, financial planners know that these costs add up, and, as a result, generally seek the lowest cost share class for their clients.
A recent industrywide review by the Morningstar found that, on a asset-weighted basis […]
Capital Gains: How to Determine Your Tax Rate
A simple-sounding question that, in the world of tax planning, is harder to answer. The simplest calculation is that, in 2021, single taxpayers will pay 0% capital gains taxes if their adjusted gross income is below $40,400, while joint taxpayers will pay 0% capital gain taxes below $80,800 of adjusted gross income. After […]
Is Dollar Cost Averaging A Winning Strategy?
The press often writes about the advantages of dollar cost averaging. The main idea is that people spread out investing over a period of weeks or months, instead of placing a large sum of money in the market at once. In other words, if the market goes down, people’s next investment will be completed at […]
Do Target-Date Funds Hit the Bull’s-Eye for You?
More than half of 401(k) participants have assets invested in target-date funds.1 These “all-in-one” funds are often the default option in workplace plans, and their apparent simplicity appeals to many investors. But target-date funds are not as simple as they appear to be. Like all investment strategies, they have strengths and weaknesses.
Focused on time
Target-date funds […]
Qualified Opportunity Funds
When it comes to our investments, when they appreciate, we want to keep as much of those gains as possible. However, when you sell assets, you pay tax on any capital gains. The Tax Cuts and Jobs Act of 2017, created Qualified Opportunity Funds (QOF’s) — which offer a way for investors to possibly defer or eliminate capital gains on existing investment […]
“Smart” Investment Strategies
Among other things, the National Association of College and University Business Officers surveys college endowments. A recent survey listed $616 billion in assets among 104 colleges. The chart shows the 40 largest.
Harvard is the largest with over $38 billion in assets, while the University of Richmond (at 40th) has $2.5 billion in assets. Endowment assets are […]
