News about <![CDATA[AGG]]> News about en-us <![CDATA[The Government Effectively Pardoned 77.3% Of The 2013 Debt Increase]]> crumpled-cash_bBY DAVID JOHN MAROTTA In “What Exactly Is Quantitative Easing?” we wrote: In 2013, the debt grew by 5.6% while the currency was devalued by at least 4.1% (GDP growth plus official inflation rate). This means the government effectively pardoned 77.3% of the 2013 debt increase, paid for by using your former purchasing power. Normally, currency can [...]]]> <![CDATA[April 14, 2014: Momentum Stocks Crashed, How About Momentum Tactical Allocation?]]> industry_sector_style_rotation_042014

We review the recent performance of  portfolios in various momentum investment categories. 

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<![CDATA[We are on our own: the phenomenal growth of 401k plans]]> bloomberg_401k_planCourtesy of Bloomberg:  So pension plans disappearing while most now need to rely on their 401k investments for retirement. Success for what?]]> <![CDATA[April 7, 2014: The Unbeatable US Stocks And Bonds Balance Portfolio?]]> mpiq_core_vbinx_2012

Is a simple 60% US stocks and 40% US bonds balanced portfolio unbeatable? We answer this question by looking at past performance in various periods and discuss the investment outlook. 

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<![CDATA[How Much Do You Need to Save for Retirement?]]> spending-retirement-income_b1In the financial advisory business, one of the most pressing and controversial topics is how much money people need to save during their working years in order to provide for long-term retirement income.  The research on this topic has evolved quite a lot in recent years, and a recent issue of Money magazine features a [...]]]> <![CDATA[Avoid losses on your bond funds by going unconventional]]> yield-curve-10yr-note-3month-tbill-1962-2013By John Wasik (Reuters) – As the financial markets await more signals on the Federal Reserve’s interest-rate policy next year, which may push rates higher in early 2015, it wouldn’t hurt to take a close look at alternative bond funds. Unlike conventional bond index funds, which may hold static portfolios, “unconstrained” or “hedged” funds are [...]]]> <![CDATA[March 31, 2014: Strategic Asset Allocation Portfolio Review]]> saa_q12014

We review the performance of  asset classes strategic portfolios  in the first quarter. We also discuss the outlook for strategic portfolios. 

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<![CDATA[Tax By Inflation]]> fading-dollar_bBY DAVID JOHN MAROTTA AND MEGAN RUSSELL Jean-Baptiste Colbert, finance minister for King Louis XIV of France, said, “The art of taxation consists in so plucking the goose as to obtain the largest possible amount of feathers with the smallest possible amount of hissing.” Perhaps the stealthiest tax is inflation. In its simplest form, the government prints money and [...]]]> <![CDATA[ETF Insider: Buy On The Dip Prospects March 31st Edition]]> Click here to read the original article on ETFdb.com.

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<![CDATA[Examining Sector Strength]]> sector_01kick_600

Good discussion here about sector relative strength by our analysts, Susan Morrison and Jay Gragnani.  Their discussion made me think of this study, published in the NYT: The soccer field has turned out to be a popular laboratory among economists, ...

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<![CDATA[March 24, 2014: Time Diversification In Portfolio Rebalance]]> time_diversification_gs_032014

We discuss variable annuity investing and review some typical variable annuity plans and their portfolios. 

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<![CDATA[Long-Term Bond ETFs Outperforming Stocks in 2014]]> ]]> <![CDATA[Today’s 20-year Olds Will Need Over $7 Million For Modest Retirement Lifestyle]]> worried-woman_b2BY DAVID JOHN MAROTTA In “Tax By Inflation” we wrote: The danger with short money is that it will almost certainly depreciate by inflation. Most young people don’t understand inflation as well as their parents and grandparents. You have to either be a student of monetary history or an old movie buff who pays attention to [...]]]> <![CDATA[After the Fed: What investors should do now]]> The facade of the U.S. Federal Reserve building is reflected on wet marble during the early morning hours in WashingtonBy John Wasik (Reuters) – For active income investors, the next year or so will be a trying time of tough love. While yields are rising, which depresses prices of most income-oriented securities, this presents other opportunities. On Wednesday, Federal Reserve Chairman Janet Yellen signaled that interest rates may rise as early as next spring, and [...]]]> <![CDATA[Gold is beating nearly every investment this year]]> <![CDATA[Time and Discipline]]> Time-and-discipline

I love this image from Carl Richards of Behavior Gap: Experience teaches us that the image above is true.  Anyone can get it right in the short run.  We’ve all seen it.  The gambler at the slot machines who walks out with a few thousand dollars, the sports fan who successfully bets on his home […]

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<![CDATA[PIMCO’s Risk Circles]]> IO Chart 1PIMCO’s risk circles, presented by Bill Gross in his monthly commentary The interesting part in this picture is that Long Term Treasuries are placed much closer to the center. Maybe the interest rate risk is really not that much higher than investment grade companies’ debts? So looks like 2014 is a year that is subject [...]]]> <![CDATA[ETF Inflows Finally Perking Up]]> ]]> <![CDATA[March 17, 2014: Variable Annuity Portfolio Review]]> variable_annuity_03172014

We discuss variable annuity investing and review some typical variable annuity plans and their portfolios. 

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<![CDATA[Drop the S&P index fund for asset-class investing]]> s&p500BY JOHN WASIK (Reuters) – You can get most of what you want for your investments from off-the-shelf index funds, but you may have to dig deeper to make your portfolio more productive. For most mainstream investors, a focus on S&P 500 index funds and a general bond market index serves them well. Yet what if [...]]]> <![CDATA[Is Rebalancing a “Myth”?]]> stacked-stones_bBY DAVID JOHN MAROTTA Last year I was given an article which reached this conclusion: So is rebalancing necessary? Even though the media and Vanguard may have you think so, when you look at the evidence – even after a topsy-turvy stretch as 2008-2010 – there is little benefit when you think about risk. It is [...]]]> <![CDATA[Every Business Should Start a 401(k)]]> 401kBY DAVID JOHN MAROTTA AND MEGAN RUSSELL In President Obama’s new budget proposal, he suggested taxing the historically pretax 401(k) contributions of approximately half a million people. Some business owners are reticent to start defined contribution plans for their employees because of this proposal. But the president’s hope to restrict the plans should actually make owners more interested [...]]]> <![CDATA[March 10, 2014: Where Are We Now In Valuation And Momentum Phases?]]> spy-trend-following-momentum-rolling5yr-032014

We review Schwab  brokerage specific portfolios. 

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<![CDATA[How To Tell If Your Financial Advisor Is Really “Fee-Only”]]> iard-step1BY DAVID JOHN MAROTTA Many consumers are interested in having a fee-only financial planner, but they don’t know how to tell if the advisor they are considering is actually fee-only. If you think how your advisor is compensated matters, read on. Financial advisors can say that they are “fee-based“  or imply that they are fee-only fiduciaries without actually being fee-only. In [...]]]> <![CDATA[ETF Insider: Buy On The Dip Prospects March 10th Edition]]> Click here to read the original article on ETFdb.com.

Related Posts:

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<![CDATA[5th Anniversary of the Bull Market: 666 Trough to Current Peak]]> 03062014_5th_anniversary_bull_market_10yearsFive years ago today, S&P made a low 666 and since then, it has been on a roll. However, other equity markets in the world have not been that lucky. The following table and charts show how these benchmarks are compared with a globally diversified tactical portfolio:  Portfolio Performance Comparison (as of 3/5/2014): Ticker/Portfolio Name [...]]]> <![CDATA[Predicting the Next Decade’s Bond Returns]]> wsj-bonds

Before investors automatically default to a standard 60/40 balanced fund (60% U.S. equity / 40% U.S. fixed income) because it has worked just fine over the past 30 years, the WSJ suggests that you think twice about the returns that bonds may deliver going forward.

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<![CDATA[Understanding the Mutual Fund vs. ETF Cost Difference]]> Click here to read the original article on ETFdb.com.

Related Posts:

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<![CDATA[Is the Federal Reserve Really Tapering?]]> tapering_bBY MATTHEW ILLIAN The Federal Reserve Board’s Monetary Policy Report is issued twice a year to Congress in February and in July. Its purpose is twofold: to educate Congress on the state of the economy and to inform legislators about what the Fed is doing to influence outcomes. As usual, the most interesting aspects of the [...]]]> <![CDATA[Estimating the Real Costs of Investing]]> chart_18feb2014One of the least-understood aspects of investing among individual investors is the total costs associated with building and maintaining a portfolio.  In comparison to the huge rises and falls that we see in the market, the expenses associated with mutual funds or brokerage costs may sound small.  Over long periods of time, however, the ups [...]]]> <![CDATA[ETF Underdogs Rise Again]]> ]]> <![CDATA[March 3, 2014: Schwab Portfolios Review]]> schwab_total_bond_pttrx_32014

We review Schwab  brokerage specific portfolios. 

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<![CDATA[Survivorship Bias]]> survivorshipbias_zps7f6ea477

Everyone in the financial services industry has seen awesome-looking backtests for various return factors or trading methods, but most people don’t even know what survivorship bias is.  When I see one of those amazing backtests and I ask how they removed the survivorship bias, the usual answer is “Huh?”

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<![CDATA[Betting against the buck easier said than done]]> currencyBY JOHN WASIK The U.S. dollar has been taking it on the chin of late. Last week saw the dollar hit a seven-week low against its rival currency, the euro. The greenback also declined against a basket of major currencies, hitting one of the lowest points of the year to date. The even worse news is [...]]]> <![CDATA[Traditional IRA or Roth IRA: Which Should You Choose?]]> ira-roth-401k-1

Congress doesn’t do much right, it seems. But when it created individual retirement accounts (IRAs) in 1974, it gave Americans one of the most versatile investment vehicles ever conceived, and one that has become the fundamental b...

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<![CDATA[February 24, 2014: Fidelity Portfolios Review]]> fidelity-mutual-fund-portfolios-compare-022014

We review Fidelity brokerage specific portfolios. 

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<![CDATA[How Much Should I Save for College?]]> college-savings-progress1BY MATTHEW ILLIAN   click to enlarge Each year, I share updated age-based benchmarks (chart to right) we use to ensure that our 529 college savings plan is on track to meet our goals. I also use the opportunity to share some related college preparation insights with our readers. This year’s article was posted on Yahoo Finance (you can [...]]]> <![CDATA[February 17, 2014: Versatile Portfolios Review]]> composite-022014

We review stock and bond portfolios and their composite portfolios. 

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<![CDATA[Obama’s myRA Plan Violates Multiple ERISA Laws]]> go-to-jail_b BY DAVID JOHN MAROTTA AND MEGAN RUSSELL The 1974 Employee Retirement Income Security Act (ERISA) sets minimum standards for retirement plans in the private sector. Among its requirements, ERISA prohibits plan sponsors from self-dealing, conflicts of interest and failure to provide diversification. Just last year, the Supreme Court ruled that workers could sue their plan sponsor over ERISA violations. [...]]]> <![CDATA[The Best 6 Moderate Allocation Funds Performance]]> moderate-allocation-funds-022014The following are a list of some of best well known moderate allocation funds:  Portfolio Performance Comparison (as of 2/10/2014): Ticker/Portfolio Name YTDReturn** 1Yr AR 3Yr AR 5Yr AR 5Yr Sharpe 10Yr AR 10Yr Sharpe FPACX (FPA Crescent) -1.1% 15.5% 8.8% 13.5% 1.37 8.0% 0.68 PRWCX (T. Rowe Price Capital Appreciation) -0.1% 17.1% 12.0% 17.3% [...]]]> <![CDATA[End-Of-The-World Money Moves]]> end-of-the-world_bBY DAVID JOHN MAROTTA The coming financial crash always looms. End of the markets, end of civilization, end of the world. How do you prepare? I, along with many other economists, agree with many of the concerns in these dire warnings. The growing debt and deficit spending taxes those holding dollars. The devaluation in the U.S. dollar risks the dollar’s [...]]]> <![CDATA[February 10, 2014: Total Return Bond Fund Upgrade Portfolios]]> total-return-bonds-22014

We review our total return bond fund upgrade portfolios. We again advocate using these portfolios for fixed income investing. 

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<![CDATA[For investors, a ‘lazy portfolio’ may be a tonic for uncertain 2014]]> asset-allocationBy John Wasik (Reuters) – For investors concerned about increasing market volatility, a defensive position might be a savvy move if stocks continue to retreat from 2013 highs. You can do that with a “lazy portfolio”: Simply buy and hold passive investments and rebalance then annually. There are several flavors, including one that I designed [...]]]> <![CDATA[2014 Employer-Sponsored Retirement Plans]]> 401kBY AUSTIN FEY 2014 Employer-SponsoredRetirement Plans   2013 2014 Elective Deferrals 401(k),403(b), 457, and SARSEPs $17,500 $17,500   Catch-up contribution $5,500 $5,500 SEP IRA & 401(k) Employer Contribution Limit Defined contribution (415(c)(1)(A)) $51,000 $52,000 Defined benefit (415(c)(1)(A)) $205,000 $210,000 SIMPLE plan $12,000 $12,000   SIMPLE catch-up contribution $2,500 $2,500 Maximum includible compensation $255,000 $260,000 Highly compensated [...]]]> <![CDATA[A ‘New Era’ for Bonds?]]> chart_4feb20142The Wall Street Journal recently published an article titled How You Can Survive a New Era in the Bond Market.  The article suggests that investors adjust their bond allocations to tilt more towards high-yield (aka junk) bonds (both corporate and municipal) and global bonds, which tend to yield more than U.S. bonds.  This advice resonates with [...]]]> <![CDATA[February 3, 2014: Alternative Investment Funds & Diversified Portfolios]]> swensen-022014

Permanent portfolios and risk parity portfolios are doing better in the recent selloff. We also review several types of alternative mutual funds. 

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<![CDATA[It’s All At The Upper End]]> GICSMatrix_zpse4a88b8f

Almost all of the performance from a relative strength or momentum model comes from the upper end of the ranks.  We run different models all the time to test different theories or to see how existing decision rules work on different groups of securities. 

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<![CDATA[We Were Wrong: Jobless Available Workers As High As 41.4%]]> jobless-2013-12 BY DAVID JOHN MAROTTA AND MEGAN RUSSELL As we mentioned in our article this week, we discovered an error in our January 19th article after it was published. We actually underreported the portion of jobless Americans. Our number only described those who are not able to, do not want to or have given up looking for work. It did not include [...]]]> <![CDATA[Bond, Utilities Bounce Buoys Some Dividend ETFs]]> ]]> <![CDATA[ETF Chart of the Day: Bond Bash]]> ]]>