Markets continued their banner year in Q3, albeit with some bumps and major rotations. Noticeably, investors preferred small-cap, mid-cap, and emerging market stocks over the dominant force of the “big US tech” stocks...
Instinctively investors know they should diversify their portfolio and most do this. Having looked at hundreds, if not thousands, of portfolios, I can tell you that diversification amounts to more than just owning multiple funds. A common mistake that investors make when trying to diversify their IRA or 401k is that they, inadvertently, create a portfolio that has the illusion of diversification...
The single most important investment in the global financial system is the U.S. Treasury Security. In my first investing class in college, I remember the professor explaining that our entire investing and financial system is built upon the premise that treasuries are the safest investment and that the U.S. always pays its debts. That statement might sound strange to those who are not a fan of the way we as a country run a deficit or to those who have paid close attention to the budget ceiling fights in recent years. Despite those factors, the premise is true, and that is why treasuries are the single most important investment in the U.S. financial system.
Socially responsible investing (more commonly understood as ESG) was once a fringe concept. In recent years, this trend has gone from the fringe to the forefront. So what is socially responsible investing?
For many years, market participants have been closely following every statement made by the Federal Reserve Chairperson and every data point used by the Fed to guide its decisions. However, it has become increasingly tiresome. While monetary policy, including interest rates, is undeniably important, the daily fluctuations caused by inflation reports and their potential influence on the Fed's interest rate decisions have become excessive...
Many 401k participants have a little-known feature available to them that dramatically increases the number of investment options and, by extension, increases the quality of their options. This feature is available at major employers such as The University of Michigan, Michigan State University, Lansing Board of Water and Light, and the State of Michigan. The feature is known as a self-directed brokerage account.
When we look back at 2023, we’ll remember it as a banner year for markets. Stocks were up across the board and even bonds produced a solid return. A rough 3rd quarter that led to a rally in November and December pulled markets ahead for a fantastic finish to 2023.
If I could only contribute to one retirement account for the rest of my working career, it would be a Roth IRA or Roth 401k. Although there are many benefits to a Roth IRA, there are three benefits that I find to be most intriguing. On top of the benefits I lay out below, you will be pleased to hear that in recent years employers have made the Roth 401k more accessible and the contribution limit on Roth IRAs has increased!