Author Archives: Lauren Tivnan

Tax Loss Harvesting: Share Your Pain with Uncle Sam

Summer is winding down. And believe it or not, 2012 is more than half way over, which means it’s a good time for investors to start thinking about the year-end tax implications of their portfolios.

We invited Steve Thorpe, Founder of Pragmatic Portfolios, LLC to share some insights on Tax Loss Harvesting. Enjoy.

Tax Loss Harvesting: Why Should You Care?

Would you invest a few hours to reduce this year’s taxes by $1,000 or more?

For investors with taxable investment accounts, this is often possible by taking advantage of tax loss harvesting (TLH). This perfectly legal strategy makes lemonade from lemons, allowing Uncle Sam to share part of the pain of the losses inevitably experienced by investors at some points during their investing career.

Between now and Continue reading

Tried and True Money Advice from Warren Buffett

Guest post by Contributing Editor, Janet Al-Saad, Mint.com.

When it comes to financial wisdom, few people merit as much attention as Warren Buffett. The man renowned as the “Sage of Omaha” built a billion-dollar empire from scratch, all the while maintaining modest spending habits that are the envy of every frugal person everywhere. Liz Claman of the Fox Business Network spoke with Buffett recently, and shares some of his wisdom with Mint Life: Continue reading

Investors’ 10 Most Common Behavioral Biases

Guest post by Contributing Editor, Robert P. Seawright, Chief Investment and Information Officer for Madison Avenue Securities.

Barry Ritholz (of The Big Picture and a Sunday Business columnist at The Washington Post) recently contributed Investors’ 10 most common mistakes to The Washington Post Business Section quarterly investing section. It’s a commentary that he has been working on for a while — the ten topics are listed with links to longer discussions of each common mistake here. I created my own investing “checklist” (here) in response to Barry’s original list. For yet one more iteration of the theme, I offer my list of Investors’ 10 Most Common Behavioral Biases.  There are a number of others, of course, and more will continue to be uncovered.  But I think that these are the key ones. Continue reading

What is Your Pension Really Worth?

Last week, we posted an article from Michael Lewitt, Vice President and Portfolio Manager at Cumberland Advisors called “The Pension Dilemma” that talked about how America’s largest pension fund, the California Public Employees Retirement Systems (CALPERS) reported an abysmal 1% return on its investments for the past year (ending June 30, 2012).

CALPERS has been in the news lately for several reasons:

  1. The California state pension is a bellwether for other state-run retirement systems across the U.S. that are also forced to face one of the most challenging periods in history: low interest rates, volatile markets and slow economic growth.
  2. CALPERS missed their own internal targets by more than 7.2% and then blamed their underperformance partly on picks made by individual investment managers (which CALPERS declined to name).
  3. The CALPERS underperformance has shaken the confidence that many investors have in their own pension funds.

What Does This Means for the Average Investor?

Retirement planning is a passion for us here at the Portfolioist. Yes, go ahead and laugh at the use of the word “passion” if you must—but that’s how we truly feel—especially in these turbulent economic times. Continue reading

The Pension Dilemma

Guest Post by Contributing Editor, Michael Lewitt, Vice President and Portfolio Manager, Cumberland Advisors. We thought this was an interesting article and thought our readers would too. Enjoy.

America’s largest pension fund, the California Public Employees Retirement System (CALPERS), reported a 1% return on its investments for the 12 months that ended June 30, 2012.  This disappointing return fell woefully short of the plan’s target return of 7.5%Continue reading

Emerging Market Indexing

Guest post by Matthew Amster-Burton, Mint.com. We thought this was an interesting article and thought our readers would too. Enjoy.

Let’s say you want to build your own stock market index fund based on the S&P 500. Easy: download a list of all the companies in the index–from 3M (MMM) to Zions Bancorp (ZION) and their market cap, and start investing. Every stock in the index will be easy to buy in whatever quantity you want.

Now, after the success of your first index fund, you decide to create an emerging market fund, concentrating on the world’s up-and-coming economies. Again, no problem. We have the internet, after all, and we can just print off a list of all the stocks in China, India, Chile, Hungary, and so on, pull out a pile of Benjamins, and go to town.

That won’t work, says Raman Subramanian, Executive Director of Index Research at MSCI. Continue reading

9 Essential Investing Suggestions

Guest post by Contributing Editor, Lowell Herr, ITA Wealth Management. Lowell is a subscriber to the Portfolioist and his investment philosophy is similar to ours.  Enjoy.

Repetition is the mother of all learning. Whether you are a new ITA Wealth Management reader or a long-term follower, there are investing basic that just don’t change, and here are a few.

Suggestions for the Astute Investor:

1.  Follow “The Golden Rule of Investing.” Save as much as you can as early as you can.

2. Develop a Portfolio Policy. This is sometimes called a Strategic Asset Allocation Plan. In simple words this means one will first determine what asset classes to include in the portfolio. We recommend five to seven basic asset classes to include the following:

Continue reading

The Collapse of the American Net Worth

Many of you are painfully aware of how many friends or family members are out of work, now under-employed, or who have lost their homes. Geoff Considine, a leading contributor to the Portfolioist, provides his take on what we’re calling the “collapse” in household net worth, starting with a recently published report released from the Federal Reserve called the “Survey of Consumer Finances” (SCF).

This study, performed every three years, provides an analysis of household income and wealth across America, and the results will astound you. The SCF is well-worth reading if you want to get a handle on the state of Americans’ finances—especially if you want to see how those same finances have changed dramatically in just three short years. Continue reading

The High Cost of the July 4th Cookout

Many Americans will be feeling the effects of higher commodity prices this 4th of July.

If you have been to the grocery store lately, you’ve probably done a double-take at the register as your outdoor grilling essentials are being scanned. Steak and ground beef prices are up almost 6% over the last 12 months and a persistent drought in the mid-West is driving corn prices up dramatically. USDA recently reported that the average price that Americans pay for food will be up between 2.5% and 3.5% vs. what we paid in 2011.

However, before you ration the hot dogs and burgers and put a hold on serving steaks at your BBQ this year, lets take a look at the long-term history of food prices in the U.S.

Don’t Blame Inflation This Time

The good news is that Continue reading

Safety Not Guaranteed

Guest post by Contributing Editor, Robert P. Seawright, Chief Investment and Information Officer for Madison Avenue Securities.

I haven’t seen it yet,  but I love the conceit behind the indie film Safety Not Guaranteed, which has opened to excellent reviews.  The words of the title are found in a mysterious classified ad in a local paper seeking a partner for time travel.  The ad also states that applicants will need their own weapons and, ominously, “safety not guaranteed.”

That’s a pretty good metaphor for investing and for life in general. Continue reading