Being wealthy doesn't mean having all the money in the world, just not having to worry about it.

The Ride Is the Reason for the Return

I despise market commentary, both for the presumption that anyone really knows the reason for short-term movements and because it distracts people from the fact that investing in equities is a matter of long-term ownership in the businesses that provide the world’s goods and services. Fluctuations in human emotions explain more of the short-term movement Read more »

Choosing between 529 Plan Contributions and Municipal Bonds

Question: We’re hoping to get your advice on an investment we’re considering outside of our retirement accounts. I’ll try to keep this brief. My wife and I have paid off the mortgage on our primary residence, and the only debt we have is a rental home that we plan to sell eventually (it currently covers Read more »

An All-TIPS Retirement Savings Portfolio?

Question: I’m curious how you might evaluate the thinking of Zvi Bodie, who notes, in this link, that 100% of the money he is setting aside for retirement is held in treasury-inflation-protected securities, and that all of one’s income needs for retirement be comprised essentially of social security plus TIPS in an IRA account. The Read more »

Are Commodity Futures a Good Hedge?

Question: I’ve been holding PCRDX since 2006 in a tax-sheltered account. How have I done? What are your current thoughts on commodities? Answer: PCRDX is the PIMCO Commodity Real Return Strategy Fund, which uses Treasury Inflation Protected Securities (TIPS) as collateral for a 100% long investment in a basket of commodity futures. Depending on when Read more »

Lesson 19 – Panic Insurance

The great investor, Warren Buffett, has said, “Unless you can watch your stock holding decline by 50% without becoming panic-stricken, you should not be in the stock market.” Buffett’s Berkshire Hathaway holding company has endured such declines multiple times during its climb from $15 per share in 1965 when he took over the company to Read more »