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Debunking Grantham’s Concerns

Date28 Jul 2014

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“For some months now, Jeremy Grantham, a respected market strategist with GMO, an institutional asset management company, has been railing about the efficient market hypothesis.” So began a June 6, 2009, New York Times article by Joe Nocera. He went on to note: “While Grantham was an early advocate of index funds for unsophisticated investors...

Bogle May Be Right About ETFs

Date28 Jul 2014

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Vanguard Group founder John Bogle created the first index funds available to individual investors in 1976, and ever since then he’s been a tireless champion of their use. Given that passive ETFs can provide advantages—such as lower costs and greater tax efficiency—over index mutual funds, you might think that Bogle would be a big proponent...

Retirement Silver Bullet #1: Move

Date22 Jul 2014

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You’ve heard that baby boomers, as well as Generations X and Y, are behind on theirretirement savings, right? These demographics are regularly bludgeoned in the media and by the financial industry’s marketing machine for their negligence in saving for the future. While some in the media are well-intentioned in their criticism, I can’t help but recognize...

Retirement Silver Bullet #2: Work

Date22 Jul 2014

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In the first of this two-part series, we discussed the amazing amount of leverage you can gain — even in the case of an apparently floundering retirement scenario — by moving from a higher cost-of-living area to a lower one. I fully recognize, however, that while many would see this as an exciting retirement adventure, others would view...

Three Facts You Don’t Know About Mutual Funds

Date22 Jul 2014

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Mutual funds are a huge and profitable business. According to the Investment Company Institute, at the end of 2013, $30 trillion worldwide was invested in these funds. More than half that amount was invested by approximately 96 million Americans in U.S.-based funds. U.S. retirement market assets are an estimated $23 trillion, and most of those investments...

How to Profit From the Coming Correction

Date22 Jul 2014

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In November 2013, I wrote an article in The Huffington Post, addressing the phony “debate” among pundits over a possible market correction. The Dow Jones Industrial Average closed that day at 15,967. On July 7, 2014, it closed at 17,024. In that article, I railed against the “gurus” then making predictions about when the inevitable market...

Small Value Returns Persistent

Date22 Jul 2014

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It’s been well documented that small value stocks have provided some of the highest returns to investor portfolios over time. The following table provides annualized returns for various equity classes over the 87-year period from January 1927 to December 2013. The data is based on theFama-French data series and excludes utilities. Equity Class Annualized Return 1927-2013...

Don’t Pay Any Mind to Financial News Gurus

Date22 Jul 2014

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It has long been my view that much of what passes for “financial news” is little more than an infomercial for the securities industry. It also serves to feed the egos of self-confident pundits, who feed viewers a daily grist of musings that often include predictions about the direction of the markets, the possibility of inflation...

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