There is something in our human nature that thinks we can buy the dip. That is, sitting with investable cash on the sidelines, waiting to be deployed during the next 20% market correction. This sounds good in theory, but doesn’t work in reality. It’s essentially impossible to do.
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I Bonds
Right now, I Bonds are paying 3.54% and are expected to go up to around 7% in the next six months. [May 2022 update: The rate is now 9.62%.] Is your online bank or CD paying that well? It is probably well past time to have a look at buying some I Bonds with rates like this.
Continue readingRetirement Savings Rate
Mr. Money Mustache helped popularize “The Shockingly Simple Math Behind Early Retirement”.
Essentially, the time it takes to reach retirement is directly related to one’s savings rate. If you live on 100% of your income, you’ll never retire. If you live on none of it, you can retire today. The line isn’t linear between the two, however:
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Low Expense Ratios
Vanguard has announced and now implemented, lower expense ratios on 38 of their most popular funds. This is most likely in response to Fidelity lowering their expense ratios to zero on a couple of their funds. The race to zero fees is in full swing, and this is great news for investors. Remember: In investing, you get what you don’t pay for.
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Why It’s Hard To Pick Stocks
Mike Piper is a CPA, author of several books on Social Security, and blogs at The Oblivious Investor. It’s a fantastic blog and I never miss an article.
He wrote an amazing analogy as to why investing profitably in individual stocks is so hard. I wont reproduce the entire article here due to copyright, but the whole post is a 90 second read, and a salient portion is below.
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Up and Down Formula
Often times, the market will fall by a large percentage, leaving investors to wonder how much will it have to climb back up for their investments to get back to even.
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Time In The Market
I’m amazed at the power of “time in the market.”
More money has been lost waiting for a correction than has actually been lost in corrections. I think it comes down to human nature, and how unintuitive investing can seem at times.
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Yearly Checkup
When a new year is upon us I use that time to look over my current investments and plan for the next year.
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Roth Conversions
Roth conversions are a way boost your tax free money within retirement accounts. This is when you have money in a Traditional 401(k) or IRA and you convert some or all of the balance to a Roth 401(k) or Roth IRA. In this way, you are converting tax deferred money to Roth, and paying taxes on it after the conversion.
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Callan Periodic Table
Pictured above is the Callan Periodic Table. The larger PDF is here.
Each year across the top represents a column of the 10 major indices for investors. The top index preformed the best and the bottom index performed the poorest in each year. Each index has it’s own color, so it is easy to see how the different indices perform year to year. This truly is a fascinating graphic.
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