What is the role of cash in your portfolio? How much cash is too much and how much is too little? How good is Chat GPT at answering this question?
Continue readingChat GPT vs Advisor: What Role Should Cash Play in My Investment Portfolio?
Why Your Goals Should Guide How You Invest
Goals-based investing uses the information contained in each individual goal, including their value, priority, and time horizon, to build a dedicated investment portfolio for each goal. This leads to a more purposeful portfolio and allows for adaptable strategies that improve the long term performance of your investment plan.
Continue readingDiversified and Steady Wins the Race
Higher inflation and market volatility have suddenly changed investors’ perceptions of risk and uncertainty. Many may be thinking now is the time to get out of the market. However, historical evidence suggests that we can’t predict where the market is going, and you can miss out on large returns if you are not consistently invested and fail to time the market. Many investors learned this lesson the hard way at the onset of the pandemic. In addition, not all investments react to economic events in the same way and at the same time. Having a broadly diversified portfolio across different types of stocks and bonds across many countries can help smooth out the effects of uncertainty about particular markets. Inflation protection and a goals-based allocation can improve the risk management side of your portfolio.
Continue readingSelecting the Right Bond Funds for Your Portfolio
Most investors are so focused on their stock portfolios that bonds are often just an afterthought. For many of them, a bond portfolio means stable value or money market funds. However, the role of bonds is just as important as the role of stocks for a successful investment experience, and even more important for some goals. The right bonds help you avoid unnecessary risks and make the most out of your portfolio, particularly in a low interest rate environment. A good bond portfolio acts like a reliable brake system on a racecar: good brakes won’t make the car go faster, but it will make it go faster around the track. If you are not the race type, you know that good breaks help you arrive safely at your destination. That’s the role of bonds, and more.
Continue readingCreate a tax-Efficient Investment Plan With These Tips
High investment costs are the most reliable predictor of poor investment performance, and investment taxes are often the largest component of such costs. Left unchecked, the performance drag due to taxes can compound to substantial amounts.
While you can’t eliminate taxes, there is some good news for investors: the effect of taxes on performance is largely under your control.
A few principles when selecting your investments can go a long way in reducing the tax drag and increase the efficiency of your savings over time.
Continue readingLearn the Basics of Investment Taxation from a Wealth Advisor Near Me, and Start Investing More Efficiently
As you probably know, virtually any monetary earnings or gains in your life are taxable, and investment earnings are no exception. First, if you are getting taxed on your investments, it generally means you have made gains. And, while not as good as gains, investment losses can be used to offset other gains or income, therefore reducing your taxes.
Continue readingUse Your Risk Capacity to Create a Better Asset Allocation
Your asset allocation represents how you divide your wealth across different investments and can be the single most important element of investment success. Arriving at the right asset allocation requires the evaluation of a number of factors that are unique to each investor.
Continue readingThe Biggest Myth About Bond Returns
You may have heard that now is not a good time to invest in bonds. With low interest rates, you don’t get much of a return. Plus, low rates today mean interest rates can only go up in the future, and you can expect bond prices to fall when interest rates rise. Some investors and analysts have declared death to the 60/40, a traditional portfolio allocation with 60 percent in stocks and 40 percent in bonds, and suggest replacing bonds with alternative investments for diversification. What is myth and what is reality?
Continue readingWhat can you do when every investment seems overpriced?
Are all the traditional investments like bonds, stocks, and real estate posed for a fall in value or at least very low returns? And what should investors do with their portfolios?
Continue readingMaking Sense of The GameStop Saga
GameStop (GME) was trading at about $19 per share until January 12 or so. Then something changed. Trading volume increased dramatically and the price started going up. So much so that it more than doubled in less than two days, causing a lot of hype, more interest, and finally closing at $328 per share on January 29. That’s 17 times more than on January 12! How can it be? And what does it mean for long term investors?
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