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Archive for the ‘Low Cost Investing’ Category

Folio Investing Celebrates Its Target Date Folios’ Five-Year Record of Outperformance

Posted in Diversification, ETFs, Investors, Long-term investing, Low Cost Investing, Regular Investing, retirement planning, Risk, Uncategorized, Volatility, tagged , , , , , , , on January 24, 2013 | Leave a Comment »

Folio Investing’s Successful ETF-Based Alternative to Legacy Target-Date Funds Offers Superior Diversification, Risk Targeting and Flexibility; Firm Seeks Distribution Partner to Broaden Availability

Folio Investing announced today that, over the five years since they were brought to market in December 2007, its Target Date Folios have significantly outperformed traditional target-date funds. The Folios have provided both higher returns and lower volatility than the competing funds during this tumultuous period. (more…)

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Getting Help in Choosing and Managing a Portfolio

Posted in 401(k), Asset Allocation, Diversification, Financial Advisors, financial planning, Investors, Long-term investing, Low Cost Investing, Portfolio Investing 101, retirement planning, Risk, tagged , , , , , on December 20, 2012 | Leave a Comment »

There is currently $5 Trillion invested in Individual Retirement Accounts (IRAs), $4.7 Trillion invested in self-directed retirement plans provided by employers (401(k), 457, and 403(b) plans), and $2.3 Trillion invested in traditional pension plans offered by private companies.  These numbers are stunning for a number of reasons.  First, self-directed retirement plans (IRAs, 401(k)’s, etc.) dramatically dwarf the amounts invested in traditional pensions.  This is part of a long-term trend, as employers move away from traditional pensions, but the magnitude of the shift is striking.  With the assets in IRA’s surpassing the $5 Trillion mark earlier this year, the amount of money in individual accounts is moving ahead of employer-sponsored plans.  What’s more, it is anticipated that IRA’s will continue to grow relative to employer-sponsored plans as people retire and roll their savings from their ex-employer’s plan into an IRA.  This matters because investors in IRA’s have even less help in creating and maintaining their portfolios than investors in employer-sponsored plans.  (more…)

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Saving and Investing for Retirement: Part Five

Posted in Asset Allocation, Bonds, Diversification, ETFs, financial planning, Investors, Long-term investing, Low Cost Investing, Mutual Funds, Portfolio Investing 101, Retirement, retirement income, retirement planning, Risk, Stock Investing, Volatility, Wealth, tagged , , , , , , , , , , on October 2, 2012 | 2 Comments »

Effective Actions in an Uncertain World: Part Five of Our Special Five Part Series

There are a number of factors that we need to predict in order to come up with saving and investing strategies for retirement.  The values that we assign to these factors will have a huge impact on whether or not we will be able to meet our goals.  First, there is the expected return that investors will make on their retirement savings.  Second, there is the common estimate that people will need about 85% of their pre-retirement income to support them once they stop working.  Finally, there is the potential impact of behavior on savings rates, investing, and spending.  (more…)

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Tax Loss Harvesting: Five Tips to Keep More of What’s Yours

Posted in Financial Advisors, financial planning, Income Investing, Investors, Long-term investing, Low Cost Investing, Personalization, Taxes, Uncategorized, Wealth, tagged , , , , , , on August 24, 2012 | 1 Comment »

Here at the Portfolioist, we frequently turn to Steve Thorpe, founder of Pragmatic Portfolios, LLC to share his insights on the topic of Tax Loss Harvesting. Here are 5 of his Tax Loss Harvesting Tips to help keep more of your money when tax time rolls around.

It’s impossible to reliably predict future changes within the investment markets, however there are numerous ways for investors to favorably influence their own results. Important areas to focus on include developing an investment plan, saving regularly, diversifying widely, adhering to an appropriate asset allocation, and paying attention to all forms of costs – including taxes. For many investors, tax loss harvesting can improve their after-tax bottom line, sometimes to the tune of thousands of dollars per year. (more…)

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Tried and True Money Advice from Warren Buffett

Posted in Active Investing, Asset Allocation, Behavioral Finance, Diversification, Financial Advisors, financial planning, financial ratios, Investors, Long-term investing, Low Cost Investing, Market Timing, Markets, Regular Investing, Retirement, retirement income, retirement planning, Risk, Stock Investing, Uncategorized, Volatility, Wealth on August 13, 2012 | 2 Comments »

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: (more…)

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The Power of Effective Diversification

Posted in Active Investing, Asset Allocation, Behavioral Finance, Bonds, Diversification, financial planning, Investors, Long-term investing, Low Cost Investing, Market Outlook, Market Timing, Markets, Passive Investing, Retirement, retirement income, retirement planning, Risk, Stock Investing, Uncategorized, Volatility, Wealth, tagged , , , , , on August 10, 2012 | 7 Comments »

Diversification is one of the most misunderstood concepts in investing.

If you read a good explanation of the strategy, you’ll learn that the goal of diversification is to combine different investments that tend not to be driven by the same factors in the economy. So when one investment lags, the others in the portfolio gain ground (or at least will be unaffected)

For example: Combining gasoline stocks with bicycle manufacturers in your portfolio. When gasoline is cheap, people drive more and bike less. When gasoline prices start to rise, people usually cut back on their driving and start biking to work. Either way, your portfolio is now less exposed to the risk of a downturn in demand for either bicycles or gasoline. (more…)

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Investors’ 10 Most Common Behavioral Biases

Posted in 401(k), Active Investing, Asset Allocation, Behavioral Finance, debt, Diversification, Dividends, ETFs, financial planning, Inflation, Investors, Leverage, Long-term investing, Low Cost Investing, Market Outlook, Markets, Passive Investing, pensions, Portfolio Investing 101, Retirement, retirement income, retirement planning, Risk, Stock Investing, Uncategorized, Volatility, Wealth on August 3, 2012 | 4 Comments »

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. (more…)

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Sector Watch: Low-Beta Stocks

Posted in Active Investing, Asset Allocation, Bonds, debt, Diversification, Financial Advisors, financial planning, financial ratios, Income Investing, Inflation, Investors, Leverage, Long-term investing, Low Cost Investing, Market Outlook, Market Timing, Passive Investing, Rebalancing, Regular Investing, Retirement, Risk, Uncategorized, tagged , , , , on August 2, 2012 | 4 Comments »

Financial theory suggests that risk and return go hand-in-hand:

Small company stocks tend to be riskier and outperform large company stocks. Long-term bonds tend to be riskier and outperform short-term bonds. Corporate bonds tend to be riskier than Treasury bonds (with comparable terms) and outperform Treasuries over time.

However, there is one group of stocks that has consistently defied this risk/return relationship: Low-beta stocks. A low-beta strategy involves selecting stocks that have a lower-than-average beta value. (Beta is a measure of the stocks’ volatility and adding low-beta stocks to your portfolio can help investors build a diversified portfolio.) The good news for investors here is that (more…)

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What is Your Pension Really Worth?

Posted in 401(k), Active Investing, Asset Allocation, Diversification, financial planning, Income Investing, Long-term investing, Low Cost Investing, Market Outlook, Market Timing, pension plans, pensions, Retirement, retirement income, retirement planning, Risk, Stock Investing, Uncategorized, Volatility, Wealth, tagged , , , , on July 31, 2012 | 8 Comments »

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. (more…)

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Emerging Market Indexing

Posted in Active Investing, Asset Allocation, Commodities, ETFs, financial planning, Global Investing, Investors, Leverage, Long-term investing, Low Cost Investing, Market Outlook, Risk, Uncategorized, Volatility, Wealth, tagged , , , , , on July 19, 2012 | Leave a Comment »

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. (more…)

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