The Modern Investor
Written by Human Advisors, for Human Investors
Prefer YouTube?
Author
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.
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?
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.
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
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.
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.
The Most Boring Market Update Ever?
It’s mid-July, which means firms like ours have been busy publishing quarterly recaps and market outlooks for the remainder of the year. How it would sound if we focused not on the last 90 days, but rather recapped the last 10 years. After all, we constantly talk about long-term investing, so why not write commentary to match?
Is the Market Flashing Caution Signs? Three Observations
Investors in “balanced” portfolios just had their second-best start to a year since 2001. At the same time, cash is cool again for millions of investors. Considering the rebound in stock and bond prices this year, here are three observations for people considering moving from cash back into stocks and bonds.
Three Things 2023’s Best Stocks Have in Common
The SP 500 is comprised of (roughly) 500 stocks, and it’s up about 15% in 2023. Yet, it would be down this year if not for these 30 companies.
How Am I Doing? Keep a Long-term Perspective When Evaluating Investment Performance.
Investors often ask, “How am I doing?” The answer may require a little color, and benchmarks can help frame the conversation. Regular review of risks and returns can help keep investment portfolios aimed at achieving long-term goals.
Why I Had a Tax Surprise, and How I Hope to Avoid it in the Future
Want more control over taxes? Here are some considerations for those investors with significant assets in taxable accounts.
What Should I Do With My 401(k)?
Target-date funds have grown in popularity for retirement savers. And for good reason. But are they the right answer for everyone? See where it might make sense to consider a more tailored approach to allocating retirement plan assets.
