risk

Wise Words From Warren Buffett

by Michael on Mar 6, 2014

Warren Buffett’s annual letter to shareholders has always been a treasure trove of investing insight. This year’s letter, which was recently released, is no different. Among other things, Buffett urges individuals to stay within their “circle of competence,” saying that: “Most investors, of course, have not made the study of […]

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Reacting to a Stock Market Increase

by Michael on Jan 8, 2014 · 2 comments

A reader named Jorio recently wrote in to ask: The stock market has skyrocketed. How can I harvest some of the gains and protect them from a “bubble burst”? Indeed, 2013 saw a huge runup in the stock market, with the S&P 500 rising nearly 30% and the Dow increasing […]

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In response to my recent post about estimating the true cost of ongoing spending, a reader (and blogger) named Edward said: On the flip side, I’m on track to have a fully funded retirement when I am ready to retire. Why forgo a pleasure now to have more money than […]

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In case you missed it, Vanguard recently released data looking average portfolio size and stock allocation as a function of age. It’s an imperfect analysis in that it focuses on retirement plan participants at Vanguard. Thus, it’s a non-random sample and limited to defined contribution plan holdings. But still… Those […]

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As a followup to my Betterment review, I just wanted to highlight a recent change in their investment strategy. In short, they’ve decided to modify their bond allocation to increase diversification. They’re doing this through the inclusion of a broader selection of domestic bonds as well as the addition of […]

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How Much to Save for Retirement

by Michael on Aug 16, 2013 · 1 comment

Have you ever wondered how much you need to save to ensure a comfortable retirement? Thanks to retirement researcher Wade Pfau, who used historical data to identify the so-called “safe savings rate,” we have an answer. He investigated both the “maximum sustainable withdrawal rate” (MWR) and the “minimum necessary savings […]

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I’ve talked in the past about why you should rebalance your portfolio. In short, you do so to maintain your desired risk profile. But how do you decide when to rebalance? While it’s good to keep things in check, there’s no sense in going overboard. While some rebalance at set […]

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Should You Invest Your Emergency Fund?

by Michael on Aug 9, 2013 · 5 comments

A reader named Austin recently wrote in to ask the following question: Can you please comment on Betterment’s recommendation of a “moderate risk” portfolio including 30-50% stocks for one’s emergency fund instead of cash. What do you think of this idea? Sure enough, Betterment is arguing that “you can do […]

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