A Potential Effect of Risky Funds on a Portfolio

Vanguard had a fund that invested in precious metals and mining stocks that had performed so poorly in the past 10 years, that Vanguard decided to rename the fund and completely change its investment strategy. This shouldn’t be a complete surprise, as $10,000 invested in the fund in 2008 would be worth just $5,051 at the end of 2017. However,…

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Investing is Hard. Here is the Proof.

If I told you the annualized return over 20 years of the S&P 500 (an index of 500 large U.S. stocks) was 7.2%, what return would you guess the average investor experienced? Higher? The same? Lower? It’s lower. Much lower. In fact, the average investor just barely beat inflation by achieving a meager 2.6% annualized return over 20 years. A…

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Focus, Focus, Focus.

Leonard Lauder, son of Estée Lauder, donated 78 cubist paintings to the Metropolitan Museum of Art. Thirty-three of them were by Picasso. Art expert William Acquavella described the donation as “without doubt the most important collection any private person has put together in many, many years. It is fabulous and worth a billion dollars, easily.” [source: Economist] How did Mr.…

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New Orleans Saints’ running back Alvin Kamara banked his signing bonus, rather than spending it. More players should be coached to do the same.

Alvin Kamara’s got his priorities straight. pic.twitter.com/9jeFLrJvqb — NFL on ESPN (@ESPNNFL) January 4, 2018 “I got my signing bonus and I put that s— in the bank and I went and got some m—–f—ing wings.” The above quote, from rookie running back Alvin Kamara, went viral on social media yesterday after being posted by The MMQB. Kamara went on…

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A word of caution regarding ‘Step-Up Callable CDs’

One advantage of “step-up callable CDs” is they generally pay a higher interest rate than traditional bank CDs, which is appealing to fixed income investors. However, these products come with a wide set of unique risks. A Certificate of Deposit (CD) is a financial product commonly sold by banks that is popular among conservative investors because the deposit is protected…

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Should You Pay Off Your Mortgage?

After years of dutiful payments, you find yourself in the enviable position of having enough accumulated savings or discretionary income that you could aggressively pay down—or completely pay off—your mortgage. But should you? Are there better ways to ensure your financial security? Making the best choice for you Paying down your mortgage faster—or paying it off in a lump sum—seems…

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Practice owners can surpass 401(k) contribution limits with Cash Balance plans.

Professionals (doctors, dentists, lawyers, etc.) may have very high wages, but the earnings come after years of school, training, buying into a practice, and paying down student debt. Because of these factors, professionals often are unable to make meaningful retirement contributions until the middle or later parts of their careers. Professionals, who are owners in a practice, can make up…

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The Rise of the Cryptocurrencies

Roughly seven years ago, Laszlo Hanyecz made a proposition on an Internet forum. Hanyecz was looking for someone to send him some pizza, so he could cure his hunger pangs. In return, he offered up 10,000 units of a little-known currency called bitcoin. Hanyecz ended up getting two Papa John’s pizzas for his bitcoin payment (which at the time was…

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