An article about the importance and best practices in rebalancing an investment portfolio.

Scams are rampant - but we can all do something to prepare and respond.

1965 Volkswagen Type 2 Microbus by Cars Down Under via CC Introduced in 1950, the VW “Type 2” microbus played a big role in the countercultural landscape of the 1960s. While not quite as dominant as the Type 1 – the VW Bug - it was a huge success for VW and spawned a slew of competitors. Arlo Guthrie and Bruce Springsteen included it in their songs, and Steve Jobs reportedly sold his bus to fund Apple. 2022 Volkswagen ID.Buzz via Wikimedia Commons After many half-hearted trie

Today, one of the major rating agencies downgraded the United States of America as a debtor, from AAA to AA+. This is the second major downgrade of US debt. As an -, and political citizen of this country, I am troubled. I am sure you are too. So, I have a few things to say about this. Let us first understand why we all just saw our collective credit score lose a few points. Fitch (the ratings agency) was quite explicit about it. Three reasons: · The expected deteriora

You are not alone. I have received emails from clients wondering the same thing, and for good reason. Source: 3 Failed Banks This Year Were Bigger Than 25 That Crumbled in 2008 , NYT To date, American bank failures have exceeded the failures of 2008. <LINK> Silicon Valley, Signature and First Republic Banks have all failed in quick succession. However, unlike in that year, the financial markets have remained calm, even as the government has stepped in to protect depositors. B

Usain Bolt, was listed at 6’ 5” tall and weighed 205lbs. Eliud Kipchoge, the marathoner was 5’ 6” tall and 115lbs. Two men, the most accomplished at their respective distances, cut remarkably different figures. Through a lifetime of training and their sports’ relentless Darwinian selection, each is a highly specialized human, almost designed for their racing distance. Although both are runners, their races are entirely different sports - different muscle fibers, different ene

This is another post on the theme that the tax code is the biggest source of financial returns. Let's talk about Custodial Roth IRAs . They are easy to open and manage. To have one, your child (or grandchild, niece, nephew or other child you care about) needs to have earned income. However, you, as the adult, need to open the account as custodian. When they turn 18 (or 21 in some states), you hand it off to them. Obviously, to earn money, they need to be old enough to reason

Nothing . That's all. Learn to do nothing. For a long, long time. The Corporate Leaders Trust Fund (now operating under Voya LEXCX ) was set up in 1935. The founders bought thirty of the largest companies at the time, and then did one amazing thing - they prohibited any changes to the portfolio . That's right. Eighty seven years of doing nothing. Since then, they have beaten 99% of their more actively managed peers and have beaten the S&P 500 over the past forty years . Ast

The same day I read of Bruce Willis' recent di agnosis of dementia, I heard an NPR segment that mentioned that financial trouble can often be the first symptoms of the disease's onset. If you, like my wife and I, have aging parents in their seventies and eighties, and haven't given this much thought, now is a good time. A 2020 study of Medicare beneficiaries showed that financial troubles - like missed payments and drops in credit rating - showed up almost six years before a

Some years are momentous; some are quite forgettable. 2022 was above average . Certainly not in terms of stock market returns, but if one measured how much our economic lives changed, 2022 was above average. Let us count the ways. Russia invaded Ukraine , an act that changed the world but surprised few who study the region. A conflict between Russia, whose GDP is half of California’s, and Ukraine, whose GDP is one-tenth that of Russia’s, shouldn’t matter all that much. But it

First of all, what will your biggest expense be over a lifetime? It isn't the big ring you bought your fiancé, nor your need for luxury travel. It could be your gambling habit - but that rarely lasts a lifetime, does it? Nope, it's not even your home, assuming you were somewhat responsible when buying it. No matter what your job is, how much you make or how you live - your life's single biggest expense category will be ... Tax! For most of us, the marginal rate (percentage o

A recent client meeting gave me the opportunity to discuss the profound difference between income, spending and wealth. In the words of Morgan Housel, "wealth is what you don't see, the nice cars not driven, watches not worn and first class trip not taken. Wealth is invisible." His book, "The Psychology of Money " , is highly recommended. Inspired by the discussion, I thought I'd create this very technical graph: Let's dive in. On the far far top-right, in the extremely fun

Too young for one? Too old? Have too little in savings? Too financially savvy to pay for one? I recently came across an interesting survey of Americans about advisors. Here's what caught my eye: Only 30% of Americans have used a financial advisor. Those who do have advisors are mostly educated and with high-incomes. I can think of many reasons for this: First, a generalized anxiety about money matters prevents those who could use the most help from seeking it. Second, this i

As I sit here writing this, the S&P 500 has fallen some 20% from it's high, the Fed has raised interest rates by a whopping 0.75% and everyone, I mean, EVERYONE is worried about inflation. It certainly feels like our economic tide is ebbing, and as Warren Buffet said, it is only when the tide goes out that you see who is swimming naked . The past ten years have been very forgiving to risk-taking investors. Interest rates had their most benign decade in seventy five years, a

What, exactly, is an engineer-turned-corporate finance executive doing in the world of personal finance? I’d say - exactly what a lifetime of education and experience has prepared him to! Let me add a little background for those who don’t know me. I am an industrial engineer, who got an MBA, and then spent more than fifteen years as an executive in corporate finance. I learned from some of the best, building and developing world-class teams and processes for large companies.

If our entire approach to investments were to be distilled into one term, it would be “evidence-based planning and investing” . We are neither the first to this idea, nor are we unique. To offer our clients the best chance of long-term success, we stick to methods and strategies that have been proven successful through robust, long-term studies . Here are a few important pillars of our evidence-based planning and investing philosophy. To succeed, make a plan “If you don't des

For my first topical post, I decided to tackle the hottest topic of our time. The question comes up often in my work. And why not? Having seen an immense Fed-fueled boom, home prices are searing hot . The 2007-08 housing bust seems a distant memory. Anyone with a home and a phone is getting spammed from call centers India and the Philippines offering to buy property. Our neighbors have all added a bedroom or two so they can enjoy a separate home-office. Stories of soaring re