Dear friends,

As you read this, Chip and I will be on vacation in Door County, the idyllic peninsula just north of Green Bay, Wisconsin. While I’m sure there have been years when she and I more needed time away, I surely cannot remember when. I was introduced, this year, to the term “trauma-informed pedagogy” and to the realization that perhaps three-quarters of our young people have taken a few more hits than they’re currently capable of managing.

Having managed their mental health for the past year, we’re going to work on our own for Continue reading →

Irresponsibility might not be the gravest sin committed by internet pundits, but it’s surely one of the most widespread. We are forever regaled by advice from “the strategist who called the 2008 crash” has announced the 2022 recession will be worse than 2008, though we are spared the messy details about the source’s other 49 missed guesses. It’s the nature of the internet that Continue reading →

“Things as certain as death and taxes can be more firmly believed” was written by Daniel Defoe in “The Political History of the Devil” in 1726. Benjamin Franklin wrote, “In this world, nothing can be said to be certain, except death and taxes” in 1789. Few subjects I have written about elicit such a passionate response as “Roth Conversion” and “Deferring Social Security Benefits.” This article is the first of a three-part series describing Continue reading →

FPA New Income (FPNIX) is a remarkable fund, simultaneously conservative and aggressive. It is an absolute return-oriented fixed income fund that embodies FPA’s corporate discipline:  don’t buy it if you don’t have a margin of safety and the prospect of decent returns. The explanation of the fund’s investment strategy begins with a simple declaration: “We do not like to lose money.” It is simultaneously an unconstrained and a very constrained strategy. It is unconstrained in that it can invest pretty much wherever opportunities arise though at least 75% of the portfolio investments must earn the “High Quality securities” designation, with the remainder likely in cash or Credit Sensitive issues. It is very constrained, though, by a long-standing and non-negotiable absolute Continue reading →

By the time this article is published in Mutual Fund Observer, I will have been retired for one day as I near my 67^th birthday. I spent 25 hours this past month listening to audiobooks about the psychology of retirement and an equal amount of time searching the internet for ideas generated from these books. I concluded that I should ease into retirement and plan on what to do for the next 365 days, sometimes called the Retirement Honeymoon Phase. This article is the second of a three-part series describing my experiences as I retire. Continue reading →

Rapidly rising inflation, bear markets, Congressional hearings over political misdeeds, geopolitically related energy price spikes. What next? Bell-bottom pants? The return of disco? These are not echoes of the 70s that people might have hoped for.

We are living in a time with many similarities to that era, including concerns about how to protect one’s portfolio – with cash losing value to inflation and the stock market suffering the worst six-month start of a year since 1970. There are also some differences. The unemployment rate is lower than during the stagflation of the 70s. On the other hand, at least on a nominal basis, bonds in the 70s paid a fair amount of interest unlike Continue reading →

Many and many a year ago, in the kingdom of ABC, Woody Allen was one of my very first guests. And we consented to take questions from an eager audience of mostly young people. Like ourselves.

The questioner looked like a high school girl and shouted to Woody from the balcony, “Do you think sex is dirty?”

Allen: “It is if you do it right.”

(Dick Cavett, “As the comics say, These kids today! I tell ya.” New York Times, 9/13/2013)

I’d rather hoped Continue reading →

Retail investors or advisors serving retail investors can choose to keep it simple with portfolios that follow a handful of easy-to-grasp rules:

1. Buy assets where there is a genuine underlying source of return (corporate earnings, interest income, and rental income).
2. Diversify across asset classes so that you don’t depend on any one stream of returns.
3. Choose asset weights that reflect the investor’s different needs: Income, Growth, Safety, Speculation
4. Reduce unneeded fees
5. Be strategic about the impulse to buy and, especially, to sell so that you can keep capital gains taxes reasonably low.
6. Rebalance across the asset classes when one of the asset classes moves too much.
7. Hold the portfolio of these diversified assets for decades.

Continue reading →