Investing involves volatility. The higher the expected return, the greater the volatility. This is axiomatic. You can’t avoid it but you can mitigate it, as I wrote in a previous column. And it turns out that reducing volatility has a number of benefits for investors. First, there’s what’s known as volatility drag. This is a…
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That doesn’t sound right, does it? Who would ever want to underperform the stock market? Shouldn’t the goal be to consistently beat the market? That would be great, but how easy is it to do? S&P Global produces an annual report called SPIVA (https://www.spglobal.com/spdji/en/documents/spiva/spiva-us-mid-year-2023.pdf) which compares how actively managed funds – those that attempt to…
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It used to be relatively simple. Prior to 2020, if you inherited an IRA from someone, rather than having to liquidate the account and pay taxes on the balance, you were allowed to “stretch” the annual required minimum distributions (RMDs) over your life expectancy. Then came the SECURE Act (2020) and the IRS interpretation of…
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The U.S. Justice Department recently released the 2022 FBI Elder Fraud Report. It does not make for enjoyable reading. There were almost 90,000 victims of fraud over the age of 60 last year. And they lost in aggregate over $3.1 billion, an increase of 84% over 2021. What are some of the biggest scams and…
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The yield curve is the difference between yields (current interest rates) on ten-year U.S. treasury bonds as compared to two-year treasury bonds. Last year the yield curve inverted, meaning the yield on the shorter-maturity two-year bonds is higher than that for the longer bonds. This is an unusual situation since longer bonds – which are…
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You may be familiar with the term “LIBOR.” It stands for the London Interbank Offering Rate, and had been used for decades by banks worldwide for interbank short-term lending and more popularly as the base rate in the U.S. for calculating the interest on a variety of personal loans. Well, it’s gone. As of July…
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