I have followed news of the surge in the number of people quitting their jobs, aka The Great Resignation, with considerable interest. The number of people quitting their jobs reached 4.5 million in November, an all-time record. The labor force participation rate had its largest 12-month drop on record for 2020 and remains well below … Continue reading The Great Resignation
The very wealthy have been increasingly vilified, and there are legitimate concerns that the United States is heading towards being an oligarchy. An interesting part of the discussion of inequality suggests that the larger problem is the top 10% or top 20%, rather than the uber wealthy (the top 1% or so). Two authors who … Continue reading Are the top 10% the real problem in society?
I, like many other investors, have followed Cathie Wood's incredible performance with a mix of awe and envy. Her flagship fund, Ark Innovation ETF, returned a stunning 150% in 2020 and the fund's 5-year annualized return is an equally notable 44.9% per year. With the 0.75% expense ratio and almost $19.5 Billion in this fund … Continue reading If you like Cathie Wood, you’d have loved Bruce Berkowitz
A number of years ago, I researched low-beta stocks and I was convinced that low-beta stocks increased portfolio risk-adjusted returns. A number of different researchers and portfolio managers also concluded that low-beta stocks boosted portfolio performance. See here and here for examples. There were several theories about why low-beta stocks outperformed higher-beta stocks. One theory … Continue reading How index investing may be killing the low-beta advantage
For all of excitement around the idea that cryptocurrencies will replace traditional government-issued money, there is an interesting potential roadblock: capital gains taxes. If you buy lunch using dollars, the only taxes you incur are sales taxes. If you buy that same lunch using cryptocurrency, you will also owe taxes on any capital gains on … Continue reading Tax considerations when using cryptocurrency to pay for things
Two of the most important calculations in retirement planning are (1) how much you need to save up in order to be ready to retire and (2) how much you can afford to draw from your savings each year in retirement. There are many different calculators available online, and each has its own assumptions. There … Continue reading A simple approach to retirement income planning
A number of years ago, while being interviewed, University of Chicago professor Harold Pollack asserted that everything you need to know about personal finance can fit on an index card. The idea got massive media coverage and went viral because so many people think that personal finance is complicated. The interviewer, Helaine Olen, and Dr. … Continue reading Can financial planning be this simple?
The high cost of post-secondary education is getting a lot of attention because of the growing burden of college debt. The reality, however, is that the average levels of debt are not going to be a major challenge for most people who complete an undergraduate degree from a public university or college. About 78 percent … Continue reading Making better decisions about higher education
One of the abiding asset allocation challenges in recent years has been how much to invest in non-U.S. vs. U.S. equities. In theory, globally-weighted market capitalization is the best choice for a general asset allocation. It is not unreasonable to think that global capital should be smart enough to reflect the relative value propositions across … Continue reading International allocation should be underweight in 2021
While the best practices of personal finance remain constant, the mechanics of banking, investing, borrowing, and decision making have made a massive leap forward. Technology enables these improvements. Brokerage fees have gone to zero. Mutual fund fees have declined sharply. Online tools facilitate all aspects of personal financial management, from banking to retirement planning. What's … Continue reading The transformation of personal finance