Investment Strategies

21October
2019
A House Divided

The latest research suggests that divorce rates in the U.S. have been falling in recent decades. Still, many people face the difficult crossroads that comes when their marriage ends. Or For Worse Studies show that fewer people get divorced during times of recession. University of Maryland Getting a divorce is a painful, emotional process. Don’t be in such a hurry to reach a settlement that you make poor decisions that can have life-long consequences. If divorce is a possibility, here are a few financial ideas that may help you prepare. The most important task you can do is getting your…

22August
2019
An Inside Look At Diversification

Ancient Chinese merchants are said to have developed a unique way to reduce their risk. They would divide their shipments among several different vessels. That way, if one ship were to sink or be attacked by pirates, the rest stood a good chance of getting through and the shipment could be saved. Your investment portfolio may benefit from that same logic. Diversification is an investment principle designed to manage risk. However, diversification doesn’t guarantee against a loss. The key to diversification is to identify investments that may perform differently under various market conditions. On one level, a diversified portfolio should…

27June
2019
A Bucket Plan to Go with Your Bucket List

The Baby Boomers have re-defined everything they’ve touched, from music to marriage to parenting and more lately what “old” means — 60 is the new 50! Longer, healthier living, however, can put greater stress on the sustainability of retirement assets. There’s no easy answer to this challenge, but let’s begin by discussing one idea — a bucket approach to building your retirement income plan. The Bucket Strategy Can Take Two Forms       1. The Expenses Bucket Strategy. With this approach, you segment your retirement expenses into three buckets: Basic Living Expenses — Food, Rent, Utilities, etc. Discretionary Expenses — Vacations,…

02May
2019
All Muni Bonds Are Not Created Equal

The city of Detroit emerged from bankruptcy in 2014. Still its previous inability to pay investors left some questioning their long-held assumption about the relative safety of municipal bonds.1 Without question, in the wake of Detroit’s troubles, gaining a better understanding of municipal bonds makes more sense than ever.2 At their most basic level, there are two types of municipal bonds: General obligation bonds, which are a promise by the issuer to levy taxes sufficient to make full and timely payments to investors, and Revenue bonds, which are bonds whose interest and principal are backed by the revenues of the…

07March
2019
When Dollar-Cost Averaging Makes Sense … and Doesn’t

The benefits of dollar-cost averaging (DCA) are generally extolled by market commentators and investment providers. But this well-regarded strategy may not always be the best approach for individual investors.1 What is Dollar-Cost Averaging? Dollar-cost averaging is the practice of buying a fixed-dollar amount of a particular investment on a regular schedule over a period of time. The primary advantage of DCA is that an investor buys fewer shares when the price is higher and more shares when the price is lower, which can mean a lower average cost over time. Keep in mind that DCA does not protect against a…

10January
2019
U.S. Personal Savings Rate

The U.S. personal saving rate stood at 5.5% in November 2017, quite a bit higher than its 10-year average of 4.5% and well below the recent five-year high of 11% in December 2012.1 The personal saving rate is the federal government’s estimate of what percent of their incomes U.S. households are saving. But market watchers and economists are mixed on what can be learned from swings in the saving rate. Why Economists Struggle They struggle with the personal saving rate because it’s a derivative number — that is, it’s not measured directly. Instead, the Bureau of Economic Analysis derives the…

15November
2018
The Great Debate Continues: Active versus Passive

Whether it’s sports, music or politics, life holds any number of “great debates” — debates that never seem to reach a conclusion. In investments, one great debate asks the question: “Which is better — active or passive investing?” The fascinating aspect of this debate is that equally intelligent people can argue polar opposite positions, leaving the rest of us to wonder what the answer is — if one even exists. Passive Pointers The case for passive management is anchored in the evidence that the preponderance of money managers have failed consistently to beat their comparative index. This, the argument goes,…

20September
2018
The Concept of Asset Allocation

If you live in or have visited a big city, you’ve probably run into street vendors — people who sell everything from hot dogs to umbrellas in carts on the streets and sidewalks. Many of these entrepreneurs sell completely unrelated products, such as coffee and ice cream. At first glance, this approach seems a bit odd, but it turns out to be quite clever. When the weather is cold, it’s easier to sell hot cups of coffee. When the weather is hot, it’s easier to sell ice cream. By selling both, vendors reduce the risk of losing money on any…

26July
2018
Synchronize Your Student With College Savings

Here are two lessons for parents of future college students about saving enough money in time: 1. No one has figured out how to save and invest enough overnight to pay for a college education. 2. Timing is critical so that the college savings and investing package you put together is available exactly when the tuition, room and board, and book bills come due. Most parents don’t have a family income that is sufficiently substantial and a budget under strict enough control that, when their children are born, they can simply start saving with monthly contributions to a guaranteed fixed-income…

31May
2018
Are Women and Retirement Strategies a Mismatch?

Forty-four percent of American women are the primary breadwinner in their house.1 Yet only 10% of women feel very confident in their ability to fully retire with a comfortable lifestyle.2  Although more women are providing for their families, when it comes to preparing for retirement, they may be leaving their future to chance.  Women and College The reason behind this disparity isn’t a lack of education or independence. Today women are more likely to go to college and graduate than men.3 So what keeps them from taking charge of their long-term financial picture? One reason may be a lack of…