Recently, investors in my state ((Lendingmemo.com lists the current availability for each state)) became eligible to invest in peer-to-peer lending at Lending Club, so I decided to investigate whether it was worth pursuing. If you are considering this as an investment, please read this post and other reviews first. I will link other reviews at the end of the post. Most of this post is from … [Read more...]
Where Do I Put My Cash?
In our zero-interest-rate policy world, "Where do I put my cash?" is a frequently asked question. According to Bankrate.com, average savings and money market accounts are yielding only 0.47%. That's right...less than half a percent. Let's compare that to inflation. According to the Cleveland Fed, their forecast for ten-year inflation calls for an average rate of 1.82%. This means cash … [Read more...]
If You Slice and Dice
I am a little hesitant even to do a post like this. Simplicity rules. For most people, a three-fund portfolio, containing a total domestic stock, total foreign stock, and total bond market fund, is all you really need. Another simple option is the four-fund portfolio, which adds domestic Real Estate Investment Trusts (REITs). (Note both REITs and bonds should be located within tax-advantaged … [Read more...]
What About Market Extremes?
There is intelligence in crowds, and at other times, people act like lemmings. Another way to put it is markets are efficient, but they are not always rational. On the one hand, you have a multitude of financial corporations funding armies of analysts, along with hedge fund managers and portfolio managers, all working 8-14 hours a day to study the companies making up the stock market. All are … [Read more...]
Predicting the Future
If past performance is no guarantee of future results, then how can I estimate what will be the future return of my entire portfolio for the particular risk level I am taking? John C. Bogle, in his 1999 book "Common Sense on Mutual Funds" emphasizes an Occam's Razor approach to investing, particularly when you index your portfolio to broad market indices. He looked at all 10-year periods … [Read more...]
About Those Online Investor Risk Questionnaires…
Maybe you have seen them from your broker...those online surveys that are supposed to help you decide on your asset allocation based on your risk tolerance. Maybe you should think twice before using them. As the U.S. Securities and Exchange Commission (SEC) puts it, "While the suggested asset allocations may be a useful starting point, keep in mind that the results may be biased towards financial … [Read more...]