For those considering purchasing a home – or for those who already have – this article by Robert Shiller in the New York Times is a must-read. (Bonus: It’s an easy read and it’s not very long!) We need to reconsider the foregone conclusion that buying a home is a sound financial investment. Does it bring value in other ways? Absolutely – but when compared to other asset classes, the act of buying a home or land has historically barely kept up with inflation. Compared to stocks and bonds, or even simply GDP, the results are not even close. Buy for privacy, for security, or for numerous other reasons, but don’t buy it because you believe it has a high expected …
Your Guide to Brexit
The UK’s now-infamous referendum vote to exit the European Union on Thursday – being dubbed “Brexit” – will probably reverberate throughout the financial system for a while, much like events in Greece seemed to never go away. One could pontificate, prognosticate and predict this thing to death, but I won’t. I’ve just created a handy chart, so feel free to refer to it when feeling anxious about all things Brexit: All comedy aside, could the UK’s exit from the European Union spread into a contagion-like event, creating a much bigger issue like EU existentialism? Sure, it’s certainly possible. Even if that happened it’s important to look back and consider the resilience of markets in the face of world wars, economic …
Fees, Fiduciaries and Orlando The Cat
I regularly pound the table on keeping fees low, giving advice for client best interest first and avoiding active management. Honestly, it’s pretty much all I write about here. You might be sick of it – sorry – but on Sunday night a great summary in video form was released. If you aren’t sick of it and you’re open to having it pounded into your head in a different way, or you just like great journalism, watch this absolutely great piece by John Oliver from HBO’s Last Week Tonight (with some NSFW language): Topics include knowing who your advisor is and how he/she makes their money, compound interest, longevity risk, 401(k) fees, the DOL fiduciary rule, and why you should only check your …
LendingClub and the Reach for Yield
T.A.N.S.T.A.A.F.L.: there ain’t no such thing as a free lunch. This is one of the first things everyone learns in Economics 101 but clearly some forget it. If something seems too good to be true, it probably is, especially when it comes to investing. Today, LendingClub is making headlines because its founder and CEO has resigned after numerous unsettling revelations were disclosed. LendingClub is a “peer to peer” financial services company – individual borrowers and individual investors are paired together, in a sort-of online matchmaking service for lending. Their (now-dubious) claim to fame is that both borrowers and investors benefit versus traditional banking services because of LendingClub. A juicy tidbit from the WSJ story: LendingClub said the board review found the San Francisco company …
What Would Steve Do?
Shares of Apple have been beaten up recently, technically the worst losing streak since 1998, but that’s not what I’d be worried about if I were a long-term shareholder. Losing streaks I can handle – it’s essentially losing a few coin tosses in a row. No, what I find concerning is Tim Cook’s focus. As CEO, he sets the tone for what kind of shareholder base Apple will have. Last night, Cook either flew across the country to New Jersey from Cupertino, CA, or he dedicated a large chunk of his day on the East Coast, to give “Mad Money” host Jim Cramer a lengthy, sit-down interview on the topic of Apple, and more specifically: AAPL. Now, normally this shouldn’t …