The S&P 500 is more concentrated than you think

Because the S&P 500 Index is concentrated of late, too much of its return is coming from too few of its stocks.

If you make orange juice from frozen concentrate you can mix it too strongly. Add only a little water, and it tastes too sugary, too tangy. Something similar is happening with the S&P 500 Index.* Lately, the index tastes funny. It’s too concentrated. “The S&P 500 has a big performance issue that should be a […]

Muni bonds still make sense

Muni bonds have significantly lower default rates than corporate bonds.

I’ve written about municipal bonds in the past. Now is a good time to update my thoughts on this asset class. Municipal bonds and muni bond funds have historically been an effective way of generating tax-free income. In high school, you may have learned about the 1819 U.S. Supreme Court case, McCulloch v. Maryland. That […]

Simple answers to big investment questions

The simple answer to most big investment questions is stay invested in stocks.

What was the proper investment move to make during the past year, when the stock market fell, rose, fell again and rose a second time? With that question in mind, the headline of a recent Wall Street Journal article caught my eye: “How to Stop Killing Your Returns.” The same article was titled “The Big […]

Keep calm and carry on

S&P 500 Index Returns During and After Big Down Days

I wrote an article in 2013 entitled, “History’s investment lesson.” The article showed that in most years the stock market experiences at least one 10% drop during the year, but ends the year with an overall positive return. What’s unusual about the bull market since March 2009 is that we have not experienced these big, […]

Don’t be chicken of the Fed

Don't let Fed rate moves make you a chicken of the stock market.

Much has been written about when the Federal Reserve Open Market Committee will raise interest rates. At its July 28 and 29 meeting, or later? Many want to know, What will a rate increase mean for stocks? If a rate increase is on the horizon, what should an investor do today? How will stocks react? […]

Putting market fears in perspective

It seems that we live in a society beset by fear. I don’t know why that is and I wish it wasn’t the case, but it’s hard not to notice the constant drum beat of negative news day after day. So, let’s try to put the news in perspective. Recently, the markets took a tumble. […]

Stick to your investment plan despite the news

Global news stories come at us with some regularity. Recent examples are the developing events in Ukraine and Iraq. When international tensions grow into major flash points and conflicts, it’s only natural for investors to wonder if they should do something to protect their stock and bond investments. Should you sell some stock, reduce your […]

Is your portfolio changing with the times?

There’s an old adage that says nothing is as constant as change. All we have to do to prove that is look around. Ten or 15 years ago, you’d talk to a person when you phoned a company. Now, you use your phone to navigate through an automated service menu, interacting with a computer (except […]

Time to pull out of bond funds? Not so fast

Most bond investors know that there is an inverse relationship between their bond investments and interest rates. When rates drop, the value of bonds tends to rise. And vice versa. And as most people also know, for the past few years the Federal Reserve has kept interest rates artificially low in order to stimulate the […]