Category - Investing

1
If It Makes You Feel Any Better, Harvard’s Portfolio Lost Big, Too
2
The Power of Compounding
3
Diversified Portfolio is Still the Long-Term Favorite
4
Fidelity and Vanguard Join Treasury’s Money Market Guaranty Plan
5
A Historical Perspective on the Current Bear Market

If It Makes You Feel Any Better, Harvard’s Portfolio Lost Big, Too

A comment that I’ve heard several times in the last few weeks is, “I took a look at my 401(k)/mutual fund statement and it was really depressing.” Well, take heart: at least you’re not down by eight billion dollars….

Various sources are reporting today that Harvard University’s endowment has experienced investment losses estimated at 22% since June 30, the end of the school’s fiscal year.  Since the portfolio was at almost $37 billion then, that translates to a loss of about $8 billion.  The Associated Press and other sources are reporting that Harvard President Drew Gilpin Faust has broken the

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The Power of Compounding

Image by: KRHamm

Image by: KRHamm

Remember all the time we spent as children dreaming about what it would be like to be a millionaire? Surprisingly, if we had spent that same amount of time running a candy store or a lemonade stand, we would all be on track. Why didn’t anyone tell us it was so easy! Of course, many adults don’t comprehend the power of compound interest, so I suppose we should give ourselves a bit of a break, but here is the secret: assuming historical investment rates of return hold steady, a 10-year old would need to invest only $25.52 …

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Diversified Portfolio is Still the Long-Term Favorite

There’s a lot of soul-searching among advisers these days, when financial markets all over the world seem to be tanking simultaneously. Still, past experience has shown that pulling an investment portfolio entirely out of stocks after a downturn is a bad idea. The problem is that no one can say for certain when stock markets will begin to go up.  Mind you, eventually some stock timer somewhere will announce that it’s time to get back into stocks, and lo, the stock market will climb, as if by magic.  But with thousands of professional stock timers out there making predictions, someone

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Fidelity and Vanguard Join Treasury’s Money Market Guaranty Plan

081 - VanguardToday’s WSJ notes that Fidelity, Vanguard, and T. Rowe Price Group have signed up for the Treasury Dept’s guaranty fund for money market funds that were held prior to September 19th. Now all the major mutual fund families with large money market funds appear to be participating in the fund (Charles Schwab is also on the list). Investors wondering about their accounts should check their fund’s web site; participating funds seem to be announcing their participation fairly prominently. You may also want to confirm that the specific fund that you own is covered; for example, Schwab’s U.S. Dollar Liquid Assets …

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A Historical Perspective on the Current Bear Market

Dimensional Financial Advisors is a passive-investment-oriented investment firm closely associated with Eugene Fama, 2003 Economics Nobel Laureate and father of the efficient market hypothesis. Today they sent me a link to a very nice presentation by their vice president, Weston Wellington. The presentation, “Is It Different This Time?” runs about 18 minutes long and puts the present stock market gyrations into a historical perspective by reviewing some of the “bear markets” of the last 50 years. It’s not overly jargon-filled and should be pretty accessible. The present market downturn reflects concerns about the non-availability of credit, the extent and …

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