Do you remember Paul Harvey? If you don’t remember life before the internet skip this paragraph. But those of a certain age may remember his daily radio program – at the end of each broadcast he would say in his distinctive radio voice: “And now you know…the rest of the story”. Earlier this month you likely saw the headlines: The first six months of 2022 saw the S&P 500 decline 21%. The S&P 500 is a group of the 500 largest stocks in the United States. The last time the S&P 500 fell this much in the first half of the year was over 50 years ago, in 1970, shown here: What do you think happened in the second half of …
Investing
When You Think About Investing, Don’t Think About The News
Today’s newsletter features a great article in the NYT by financial columnist Jeff Sommer. The news and images coming out of Ukraine are horrifying and my heart aches for the millions impacted by Russia’s aggression. It is difficult to imagine what they are going through. The article begins: The worse the news, the less you should think about it. No, that's not a good guide to life. but shutting out the din of current events is a reasonable approach when investing. Sommer speaks with Richard Thaler, a Nobel Prize winning economist who pioneered the study of behavioral economics. Follow the news, of course, and let your emotions flow. But don't let them affect …
A Stock Market Peak is not a Cliff
I ignore a lot of financial journalism. Much of it is noisy clickbait and not relevant to the long-term goal-focused investor. In fact some have dubbed it “financial porn”. But this headline, dated December 10th, 2021 from Marketwatch caught my eye: The S&P 500 is an index (group) of stocks that includes 500 of the most valuable companies in the United States. This index includes companies nearly everyone has heard of such as Amazon, Google, Microsoft, Facebook, Home Depot, and Tesla. Except for Tesla I’ve used each of these company’s products and you probably have too. The index went on to notch a total of 70 record closes in …
Three Years Later – Micro Investing with Acorns
Three years ago, I wrote about my lifelong passion (some would say obsession) for spare change. This dates back to counting the spare change and “egg money” in my grandmother’s chipped gravy boat in the 70’s. Today, this is the spare change stash in my office: But here in the 21st century, especially during a pandemic, I don’t have a lot of cash transactions, and therefore not a lot of physical spare change. Enter the micro investing app Acorns* which invests your digital spare change. Three years ago, I signed up for Acorns and linked my checking account. The checking account is my “funding source”. Then I linked my credit card. You can link more than one …
Inflation-linked Savings Bonds – High yield, Low risk!
Like many of my clients, you may have a dusty pile of paper savings bonds lying around somewhere. Maybe they belong to you or your children. Odds are they were gifts from an older relative. Most likely they are EE bonds, which have their charms.** However, the savings bond I want to talk about today is the I bond. Jason Zweig of the WSJ recently called I bonds “the best-kept secret in America”. I bonds were introduced in 1998. The “I” stands for inflation, which has been heating up recently. The variable inflation rate you earn on I bonds is adjusted every 6 months in May and November based on inflation as measured by the Consumer Price …
