Withdrawing from a Passive Portfolio

A well-diversified, passively managed portfolio of low-cost index funds has fared well for retirees over the years despite volatile market conditions. Modest annual withdrawals from conservatively managed portfolios should not have caused retirees any concern about running out of money.  For most portfolios used in this analysis, accounts ended with higher values than their starting [...]

Advisors’ Pay Tells What They Do

If you want to know what a financial advisor does, the most common method is to ask — and the most common response from an advisor is that they help clients achieve their financial objectives by getting to know their needs, yada yada yada. Now, if you really want to know what an advisor does [...]

S&P’s US “Negative Outlook” Shocks Washington. Why?

When Washington politicians were on the bandwagon accusing bond rating agencies as being co-conspirators in the subprime mortgage crisis, little did they know that the changes they had insisted upon would come back to haunt them. No one in Washington should have been surprised on Monday when S&P issued a “negative outlook” for the credit [...]

Lower Your Tax with Index Funds and ETFs

If your actively managed equity mutual funds distributed capital gains taxes last year, perhaps it’s time to consider index funds or exchange-traded funds (ETFs). Besides low fees, these investments are more tax efficient than actively managed funds because security turnover is low. This makes index funds and ETFs very appealing when the taxman cometh. There [...]

Behavioral Finance Funds Misbehave

Behavioral finance has its roots in the 1970s with groundbreaking research from Daniel Kahneman and Amos Tversky. They dug through a series of behavioral experiments and began to uncover a series of human biases – strange twists in behavior that cause us to act irrationally and against our own interests. The two outlined a series [...]