Home ownership is often called both the American Dream and the biggest investment of your life. It’s debatable whether a house is truly an investment or not, especially when we’re talking about your primary residence. Whether it’s an investment or not, house prices do change over time and the equity you build can be impacted…
How to Create Your Own Pension
Social Security is one of the most unique retirement strategies available because it protects against: Volatility risk Longevity risk Inflation risk Insurance risk (death of a spouse) Cognitive risk Since so many people are woefully prepared for retirement in terms of their assets, Social Security will be required to play an important role in retirement…
Personal Finance For Normal People
When I came up with an outline for my book proposal for what eventually became A Wealth of Common Sense: Why Simplicity Trumps Complexity in Any Investment Plan, my grand idea was to make markets, investing, and personal finance accessible to normal people. I wanted to explain complex topics using plain English, a little bit…
Animal Spirits Episode 74: Footing the Bill
This week’s Animal Spirits with Michael & Ben is sponsored by YCharts: Mention Animal Spirits and receive 20% off your subscription price when you initially sign up for the service. We discuss: The dreaded yield curve inversion — useful signal or noise? Who’s smarter — the bond market or the Fed? Which generation is in more trouble financially…
Economic Growth Heading Into a Recession
A reader asks: I’ve heard ad nauseam that we are in the late innings of the expansion, but also that since we are at near 3% GDP, it is unlikely for us to quickly go into negative GDP growth and a recession. Would a certain level of GDP make it unlikely that a recession is…
Talk Your Book: Creating a Buffer
Today’s Animal Spirits: Talk Your Book is presented by Innovator ETFs: We discuss: Surviving the upside when trying to hedge the downside The ideal client for a hedging strategy Using options to provide a buffer on the downside and capping the upside Why the payouts of a structured product are typically more appealing than the…
How Often Is It a Stock-Picker’s Market?
One of the reasons it’s so difficult to outperform the market is because so many individual stocks themselves underperform the market. It’s not a symmetrical distribution where half the stocks outperform and half underperform. A few years ago Michael Cembalest at JP Morgan performed an extensive study on the Russell 3000 Index, which is a good…
Why Are IPOs Oversubscribed?
Levi Strauss created the first pair1 of blue jeans in 1873. He went to San Francisco to make his money in the gold rush but found more success using denim and rivets to make pants that would last longer. They were actually called waist overalls until 1960 when baby boomers began calling them jeans. In…
Competing Takes
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In the wake of the recent college admissions bribery scandal that ensnared Aunt Becky and a whole host of other wealthy people, there were generally two takes from the content/social media apparatus: (1) College is a meritocracy that benefits the rich. It shouldn’t come as a shock to anyone that rich people pull strings to get…
Animal Spirits Episode 73: The Expectations Gap
This week’s Animal Spirits with Michael & Ben is sponsored by YCharts: Mention Animal Spirits and receive 20% off your subscription price when you initially sign up for the service. We discuss: What Congress doesn’t understand about financial services. The college admissions bribery scandal. Does it matter where you went to college? Can tech companies solve higher education?…