When building a comprehensive financial life plan, it is tempting to look back at recent stock market history to decide where to invest today. However, constantly chasing past performance by picking last year’s winning mutual funds or stocks is one of the most common—and costly—mistakes an investor can make. As your Personal CFO, I want
Chasing Past Performance: Why Last Year’s Winners Seldom Repeat Read More »
If you turn on the financial news, you are instantly bombarded with predictions. Pundits constantly argue about which stock is about to soar, when the next recession will hit, and exactly when you should buy or sell. For a diligent saver planning for the future, this constant noise is exhausting. Fortunately, there is a much
Investment Stewardship: Why We Don’t Outguess the Market Read More »
When building a financial plan for your future, retirement inflation protection is often the most misunderstood piece of the puzzle. If you ask a room full of retirees in St. Louis what their biggest financial fear is, most will say, “A stock market crash.” Because of this fear, it is incredibly tempting to sell your
Retirement Inflation Protection: Why “Safe” Assets Can Be Risky Read More »
When you look at a picture of an iceberg, what catches your eye? It’s the glistening white peak jutting out of the water. It is impressive, visible, and demands attention. But if you are building a comprehensive Financial Life Plan, focusing only on that peak is a dangerous mistake. As we all know, that peak
Financial Life Plan: The Iceberg Illusion & What Lies Beneath Read More »
Your Financial “Drift” and the Need for Rebalancing If you’ve checked your account recently, you’ve seen that U.S. stocks have been the undisputed champion of the global market. When a core part of your plan grows this fast, it can cause your portfolio to “drift” away from its original risk target. This drift is
What Is Portfolio Rebalancing? A Smart Way to Manage Risk Read More »
Against the backdrop of heightened political uncertainty, potential trade wars, and lower consumer sentiment, investors may have concerns about whether the US could tip into a recession. The NBER identifies recessions using backward-looking data, so we won’t know we’re in recession until after it’s begun. Luckily for investors, markets are forward looking and generally react
Recession and Markets Read More »
The past five US stock market sessions have turned up the volatility to 11.1 The decline of -10.5% over April 3–4 was the worst two-day stretch for the S&P 500 Index since March 12, 2020. Then, on April 9, the index gained 9.5%, the third largest one-day return in 30 years. During these sorts of
The Longer View on Stocks Read More »
It’s been a couple of years since the emergence of single stock ETFs which, as the name suggests, provide exposure to a single stock. A number of these have focused on Magnificent 7 stocks,1 likely providing a nauseating recent experience given the disappointing start to the year for those stocks. Some of these ETFs even
Magnifying Single Stock Volatility Read More »
If top stocks exert a gravitational pull on the broad market’s return, the Magnificent 7 have acted like the TON 618 black hole1 over the US the past few years. Accounting for about one-third of the S&P 500 Index’s weight2, the performance of these stocks has been a big driver of market capitalization weighted US
Many investors seem to be pessimistic about the direction of the market. If history is any indicator though, that’s a bad time to get out of stocks. The American Association of Individual Investors polls its 125,000-plus members weekly on their expectations for the stock market over the next six months. The proportion expecting the market
