On the surface, it’s logical that owning a diversified basket of public stocks (individual companies and/or indexes) is reflective of the broader economy, but the data doesn’t support it. In 1996, roughly 8,000 companies were listed in the U.S. stock market. Today, that number is fewer than 4,000.
It happened pretty quickly. Everything seemed to be humming along nicely, with the S&P 500 reaching an all-time high in mid-February, and now we’ve suddenly found ourselves in a new…
Every year, experts, analysts, and pundits flood the financial media with bold market predictions. Some forecasters claim markets will soar; others warn of impending doom. These predictions often grab headlines,…
I have many pet peeves. I don’t like it when pillows in our house are lying on the floor. It irritates me when people talk on speaker phone in public. It drives me crazy when people rush to stand up in the aisle of an airplane once it lands (I’m really not as angry as it might seem).
In the 1950s, Harry Markowitz was one of the creators of Modern Portfolio Theory (MPT). In summary, he was able to create an “optimal” portfolio of 60% stocks and 40% bonds. Over time, this mix generated most of the returns of stocks with much less downside risk. This was the early introduction of the asset allocation issue that is critical to portfolio construction. However, is this still the optimal way to create a portfolio?
When evaluating an investment portfolio, most people tend to focus on the return it provides. This is certainly understandable, as it is fairly intuitive. “I put in $100; it’s now worth $110. Therefore, my return is 10%.” However, this leaves out a key part of the overall story – taxes.
Broadly speaking, from the standpoint of most investment and tax professionals, investments can generally be classified as either “tax-efficient” or “tax-inefficient.” I’ll loosely define these terms as follows:
Interest rates and your portfolio are interconnected. This relationship creates market behavior that affects investors and borrowers alike and is often reflected in shifts within the economy. Understanding how they…
One central truth of investing is that it inherently involves risk—investments might result in losing some or even all of the money invested. However, the returns we enjoy from investing…
In the ever-evolving landscape of investments, a significant trend is reshaping how wealth is grown and managed: private asset managers are increasingly opening their doors to high-net-worth and retail investors….