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My Investment Portfolio: Full Disclosure

In writing about safe, simple investing, I often mention that I hold just 9 funds in 2 accounts. And often people ask me about those specific investments or accounts…. I’ve been reluctant to talk about this, for a variety of reasons. Originally I had some privacy concerns, though with a year of blogging behind me, …

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The 3 Paths to Wealth

What’s the surest path to riches? Since the dawn of history, human beings have fretted over this question, throwing themselves into schemes and enterprises to produce wealth. Often those schemes have promised to create wealth quicker and with less effort than ever before. More often than not, they haven’t delivered…. Whether it’s been trading tulip …

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Do You Really Need a Financial Advisor?

I often hear from readers about their advisor relationships. Some wonder how they should go about choosing an advisor. Others already have one, but are concerned about the quality or expense of the advice they’re getting. Some readers are inclined to leave their advisor, but don’t know how to make the transition. This is a …

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My First Dip Into Principal: Market Timing or Cash Management?

This isn’t one of those full-disclosure "reality" blogs where I document every lurid detail of our financial life. I’m a pretty private person by nature and it’s been a long, drawn out process just for me to talk about our finances as much as I do. I got to this point because it became clear …

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3 Sure and Simple Indicators for Stock Market Success

Up until the mid-1980’s, canaries were used as an early warning system in coal mines. The birds’ high metabolism and rapid breathing rate, on top of their small size, meant they would concentrate atmospheric toxins in their bodies quickly. Deadly underground gases such as methane and carbon monoxide would affect the birds before reaching concentrations …

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How I Rebalanced Through Perilous Times

“Benign neglect, bordering on sloth, remains the hallmark of our investment process." —Warren Buffett To rebalance, or not to rebalance? When? How? We’ve reviewed the sometimes conflicting and arbitrary advice of a number of experts. We’ve found a vague consensus in favor of rebalancing, but we’ve also seen studies by respected voices questioning whether rebalancing …

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Rebalancing: Should You Bother?

In my earlier post we analyzed when to rebalance your portfolio and discussed the mechanisms for how to rebalance. Now let’s take a contrarian step back and question the entire rebalancing process. Does rebalancing actually pay off in the real world? Should you even bother? William Bernstein: “0.5%” William Bernstein is one of the few …

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When and How to Rebalance Your Portfolio

Rebalancing your portfolio means adjusting the current asset allocation, moving it closer to some previously-chosen target. In theory, rebalancing captures a portion of the profits earned by your winning investments, and reinforces your losing investments so they can shine in their own time. The majority of financial experts advocate some form of rebalancing. And virtually …

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Diversification: Why Seeing Red Can be a Good Thing…

Can watching your investments go down ever be a good thing? To answer that, you need to know a little about my weekly investing routine.… For years I’ve tracked my investment portfolio on a My Yahoo page. It doesn’t take much space: currently just nine mutual funds and ETFs make up the entire portfolio across …

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My Top Investment Picks for the Future…

I’m often asked where I think the economy or market is headed. Readers of my CNN Money interview, or my recent article on overcoming the fear of stocks, might think I’m especially bullish on stocks. But that’s not the case. I’m bullish on diversification. I like bonds too. As I write this, my allocation to …

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Mastering the Fear of Stocks

“I won’t own stocks — I don’t want my savings to go down.” That seems to be the primary investing criteria for a number of people. But understanding and mastering this fear can be key to achieving financial independence. There are a select few high earners who can afford not to own stocks. And there …

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How Much is Too Much in a Single Investment?

A reader writes: “…what would you consider a safe percentage of one’s portfolio in brick and mortar real estate investments? Currently, approximately one third of my portfolio is in rental properties. I have pulled back on investing in the stock market for now and am considering increasing my percentages in the rental market versus other …

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Passive vs. Active Investing: Will We Ever Learn?

Did you monitor the political and economic news of the past year with unease? Did you make any changes to your investments in response, or wish you had — or hadn’t? As much as I follow passive index investing, there are still vestiges of earlier philosophies in my portfolio. And the temptations to diverge from …

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How Investment Newsletters “Beat” the Market

You’ve probably seen the over-sized envelopes in your mailbox: “Get the Prognosticator’s Latest Picks,” “We Were Right About Company ABC – Buy XYZ Before It’s Too Late,” “Lock in Returns of 400% or More…” Inside you find a half-dozen various-sized pieces of paper extolling the virtues of yet another investing newsletter, complete with testimonials, a …

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Is Rebalancing the Achilles’ Heel of Passive Investing?

Pick up any mainstream personal finance publication and you’ll read about the benefits of passive or buy-and-hold investing — putting your assets in a few low-cost index funds or exchange traded funds (ETFs) that will capture market returns with less risk and expense over the long haul. It sounds like the easy, automated route to …

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An Early Warning System for Your Investment Portfolio

It’s every investor’s worst nightmare. You check your portfolio one morning and find it’s worth much less than you thought, or has lagged the market significantly. In my experience, that usually happens due to a lack of diversification. Imbalances of different kinds can sneak up on even the most experienced investor. (I’d categorize my most …

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Investing for Income When Interest Rates are at Historic Lows

In today’s shockingly-low interest rate environment, which the Federal Reserve has pledged to maintain into 2014, it is more difficult than ever to find safe high-yielding investments. A reader writes: “I have a CD coming due and the interest rate is going to be terrible. I’ll probably just renew it at the best rate I …

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Should I buy gold?

A reader writes in to ask: “A relative has been saying that our economy is going to collapse and I should put money in gold because the world will fall back on it. What do you think about precious metals?” There has been tremendous investor interest in gold and other precious metals in recent years. …

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How My Investments Prospered in the Lost Decade

Some might wonder how I managed to retire in early 2011, after the terrible 2000’s, which many analysts have called the “lost decade.” (At the start of January 2000, the Dow index stood at 11,497. At the end of December 2010, it was less than 1% higher at 11,578. An atrocious return, even if dividends …

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3 Proven Investment Strategies

I’ve been investing for the better part of two decades now. I’ve managed a sizable portfolio through two historic bear markets and spent countless hours reading every book, blog, and article I could find on investing and personal finance. During that time I’ve examined nearly every strategy and wealth-building scheme that’s crossed my path. In …

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