The Modern Investor
Written by Human Advisors, for Human Investors
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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.
Three Things About Higher Rates
Interest rates on bonds haven’t been this high in about 15 years. Whether you consider this to be good or bad news may depend on your perspective. Higher rates generally offer a better starting point for bond investors, and high-quality bonds may be in a better position to offset other risks in your portfolio. Stock investors traditionally have been willing to pay less (in terms of P/E multiples, for example) for expected earnings as interest rates rise, which can put pressure on stock returns. Regardless, history has seemed to reward stock owners over the long term, even in periods characterized by higher interest rates.
Returns That Matter: Can You Keep More of What You Earn?
Asset allocation – the percentage invested in stocks, bonds, and other asset classes – rightly receives a lot of investor attention. Asset location, on the other hand, is often overlooked. If you pay taxes on investment income, that could be a costly mistake.
Earn too much for a Roth IRA? Two considerations before you use the ‘backdoor’ Roth IRA.
The backdoor Roth IRA strategy can be an effective way for high-income individuals and families to save for retirement. Be careful to avoid common pitfalls that might create unexpected and unwanted taxes. Consider all your options and try to think holistically about retirement – few if any solutions are one-size-fits-all.
July Market Dashboard
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?
2nd Quarter 2023 Market Update
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.
Market Dashboard
1st Quarter 2023 Update
Five Strategies for Maintaining Control of Your Career and Lifestyle
Several economic factors have created profitability headwinds for many employers. Inflation has waged war on profitability. Higher interest rates have increased corporate borrowing costs. These factors along with a workforce that is increasingly valuing work-life balance have the potential to make firms less profitable. In many cases this causes CEOs and CFOs to take a careful look at their most important and largest investment: their people.
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 is the Market Doing?
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.
Did I Just Pay Too Much Tax?
Not happy with your tax bill? Now that most individuals and families have filed 2022 taxes, it could be an ideal time to start tax planning for next year.
Are Stocks Ugly?
Are stocks as unappealing today as they have been in 15 years? By one measure, the answer may be yes. Still, stock investors may be well-served to focus on the long-term.