State and cities are in a world of pain at the moment as they face another year of gut wrenching (and politically unpopular) service cutbacks and layoffs. Once again they must balance their budgets in the face of possible declines in Federal funds to states and drooping real estate tax revenue. That cold reality combined with the prediction of influential analyst Meredith Whitney that numerous municipal bankruptcies could be coming down the pike, fueled a three-month long drop in municipal bonds. In the last two months, $25 billion has also been withdrawn from mutual bond funds.
Rick Ferri is not sitting on the fence in the active versus passive investing debate. He has both legs firmly planted in the passive camp, as the cover of his new book amply illustrates. Above the title, The Power of Passive Investing, is a picture of a businessman pulling open his jacket to show a Superman-style uniform underneath. In place of the “S” for Superman is a “P” for “Passive”. Continue reading →
No one knows for sure what 2011 will bring in the markets. Will the sun continue to shine on stocks? Are the bond markets in for a stormy year? Is gold a bubble or destined to set a few more price records?
No one knows the answer to all these questions with complete certainty, but some people have a pretty educated guess.
In mid-January, a group of investment advisors joined us for a roundtable discussion of the Investing Outlook 2011. We covered a lot of topics discussing strange market trends, global hotspots, oil and gas, technology, healthcare and the attraction of dividend stocks, among many other topics. Continue reading →
Amanda Steinberg realized a few years ago that she’d gotten pretty good at one part of the money equation : earning it. What she wasn’t doing as well at was saving and investing it. An entrepreneur since graduating from college, Steinberg decided to create a web site and hire a few experts to help her figure this all out. Presumably if she was facing a struggle saving and investing her earnings, so were other successful women. Continue reading →
Behavioral finance research has shown that individual investors too often invest in stocks that are in the news, and that those stocks then lose money. A recent story in the New York Times illustrates why this may become an even less successful stock investing strategy: program traders are beating average investors to the punch. Continue reading →
Recently we found a fascinating lecture from Nobel prize winner Daniel Kahneman on the price — and nature — of happiness. His published work on the subject determined that $75,000 per year was the magic number. Below that we’re unhappy. There and up, relatively content.
The political value of understanding National satisfaction might be the chance to create policies that better serve what truly make us happy. Invest in road construction, for example, not just because it creates jobs, but also because we don’t like commuting and making it more pleasant would be a boon to quality of life and happiness. For investors, it might be trying to determine how happiness correlates to economic growth as they piece together a global asset allocation, or which industries or companies might benefit from a government push toward a national good mood. Continue reading →