2017

Most employers, especially the medium and large-sized ones, provide some sort of retirement plan.  A large percentage of those are traditional 401(k)s, where you contribute pre-tax dollars into the plan, you do not pay any taxes on gains inside the plan, and then every single dollar you take out of the plan in the future is fully taxable.  Another well-known retirement account is the Roth IRA, which is almost the complete opposite of the 401(k).  Like 401(k)s, the growth inside Roth IRAs is not taxed, but unlike 401(k)s, post-tax dollars go in, you can’t save into them right out of…

Life is complicated, but does passing money to your beneficiaries have to be also? In theory it shouldn’t, as all you want to specify is “when I die, give this much to these people”. That sounds so simple, yet when it comes time to create a process that would allow that to happen, a lot of picky little details get in the way. Getting any of them wrong increases the chances that your estate plans could go awry. Consider these eight ways to get your estate strategy correct: 1) The More Accounts and Institutions, the More Paperwork. Every account you…

Let’s keep this simple. U.S. stocks by almost any measure that doesn’t obscure reported earnings are either at or very near record levels. Here’s a look at a couple valuation measures we’ve discussed in the past – the Shiller CAPE and the S&P 500/GDP. What’s immediately noticeable from both measures (shaded in blue) is that they are toward the top of their historical ranges, exceeded only by the tech bubble in 1999. What both of these charts don’t show however is what happens when we adjust for the above average corporate margins and below average economic growth that we’re observing…

Halfway up the slope of a volcano lived a monkey. Like his fellow monkeys, he spent the majority of his days picking and eating fruit off the trees growing on the side of the volcano. Unbeknownst to his friends, however, he dreamed of one day opening his own banana pie stand where he could spend his old age providing delight to others, just making and serving pie, passing the time in enjoyable conversation. He dreamed this every day as he foraged, and it made him happy. But he knew he would only get there if he grew big and strong…

Being disciplined is hard. When we think about our own private lives, if we’re being honest, none of us have any trouble coming up with instances where we broke down and diverged from our plan. Whether around dieting, exercise, or chores, discipline can wane – hopefully for only short periods of time when it does. When it comes to investing however, losing our discipline around what we buy and at what price can have much more dire consequences than missing a daily workout. Just last month we discussed how long-term returns can get cut in half by getting caught up…