The Modern Investor
Written by Human Advisors, for Human Investors
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Where Will Interest Rates Go Next?
There was a 50% chance rates would be cut by 1.5% this year, all the way to the 3.50% to 3.75% range.
At the same time, the idea of rates remaining high (or even rising) seemed improbable, to say the least. Fast forward to today. The current odds that the lower end of the Fed Funds target range will be 5.0% or higher by the end of the year is basically a 1-to-1 coin flip.
Consider this another example of just how quickly expectations about interest rates can change.
Are Mutual Funds Still Relevant?
It’s a question we have thought about often. Click to read some of the pros and cons, as well as alternatives that could be worth considering for high earning individuals and families with meaningful amounts of taxable investments.
Looking Past the S&P 500: Is Everything at All-Time Highs?
If you are reading this, the odds are high that you don’t have 100% of your investable assets in an index fund tracking the S&P 500. You probably own other types of investments. So, what about smaller companies? Or foreign companies? Or other asset classes? Are they also at all-time highs? It turns out other pockets have not participated in this run, at least not to the same degree.
S&P 500 Peaks: Reviewing the Price vs. Value Debate for Investors
The S&P 500 closed the week at the record price of 4,958.61. It has never been higher. And price alone is largely irrelevant. An asset bought with a hefty price tag can both deliver or destroy a ton of value.
1,464 Highs and Counting: Why the S&P 500's Record Run May Not be a Sell Signal
Since 1950 through the end of last week (January 26, 2024), the S&P 500 has closed at the all-time high on 1,464 separate occasions. Last Friday was just the most recent. Is the market saying it’s time to sell?
Want to Retire Richer? Five Ways SECURE Act 2.0 Could Help in 2024.
SECURE Act 2.0, passed in late 2022, was full of new provisions for retirement savers and investors. Now that a year has gone by, it may be a good time to remind ourselves of some of the most important changes going into effect this year.
Bitcoin ETFs: Should You Own One?
Investors have a new way to invest in the cryptocurrency that is regulated, transparent, and relatively accessible. Now what?
The Best Investments from 2023
Every once in a while, we feel the need to be less serious and write about something that is purely entertaining (well, for us nerds, anyway). This post should be treated as such. Pure entertainment. Nothing actionable. Absolutely no advice. To that end, here are the best investments of 2023.
Roth vs Traditional 401(k) in 2024: Navigating Retirement Planning and Tax Planning
Retirement planning options continue to evolve, and the Roth 401(k) has become an option for more and more people. Determining which is better - Roth or traditional 401(k) - will often come down to the assumptions made around current vs. future income levels, current vs. future income tax rates, and when (or if) retirement savings will be spent down. Sometimes the answer may seem obvious. For those with murkier forecasts, using both options can make sense, too.
Small Companies. Small Returns?
Traditional theory suggests investors should earn higher returns in riskier investments, like small caps. However, small cap stocks have underperformed large caps for more than a decade. And they have even underperformed bigger, more stable stocks since the late 1970s. Which begs the question: why own smaller, riskier companies if we aren’t earning higher returns?
November Market Dashboard
Time to Buy Bonds?
Is it time to buy bonds?
This question has become much more common as interest rates have risen. Recently, the yield on 10-year U.S. Treasury bonds hit 5% for the first time since 2007. Many money market mutual funds (say that five times fast!) are yielding over 5%.
So, are bonds a good buy now? Here are a few considerations before pulling the trigger.
October Market Dashboard
3rd Quarter Recap, Observations & Opportunities
Feeling deja vu? Q3 may have brought back feelings from 2022. Rates moved higher, and most everything else went lower. Watch out quarterly recap, and listen to the end for some year-end tax-saving tips.
September Market Dashboard
After the 401(k), Where to Invest Next?
Some investors prefer to max out the 401(k), either with pre-tax contributions or after-tax Roth contributions. Others contribute just enough to take full advantage of an employer match. And for many others, the answer is somewhere in between. Regardless of how that question is answered, people often wonder where to go next. What makes the most sense after 401(k) contributions are finished for the year? Let’s look at a few options, specifically through the lens of tax treatment, availability, and flexibility.
Time for Open Enrollment? Three Benefits That Shouldn’t be Overlooked
Soon, many of us will receive a 20-page PDF from HR with a myriad of complex options to navigate in advance of the always stressful deadline. But before you just re-enroll in the same benefits from last year, grab that pumpkin spice latte while we review some of the most financially impactful benefits you may want to consider.
5% Money Market Yields. Pros and Cons.
Cash is cool. Interest rates on money market funds are well over 5%. The 3-month U.S. Treasury Bill yield is 5.5%. Assets in money market funds are at all-time highs, nearing $5.5 trillion. Some people have asked if they should be investing in stocks or other asset classes when they can safely earn 5%. Here are a few things to consider when trying to answer that question.
August Market Dashboard
HOUSING: Three Trends to Watch
From 2019 through 2021, over $6 trillion in home loans were refinanced at ultra-low rates. Cheap money has many homeowners feeling trapped. Zillow just reported half of buyers surveyed between April and July were first-time homeowners, further evidence existing owners are staying put. With existing supply depressed, new construction is attempting to fill the void.