Tag Archives: Warren Buffett

Financial Wisdom

With each installment, we try to impart financial wisdom on our readers. It generally comes by way of general rules and valuable pointers. This time we turn the focus to distilled financial wisdom. First from the Oracle of Omaha, Warren Buffett in his annual letter to shareholders. It is a lengthy read, but always worthwhile. You can find that here: Warren Buffett’s letter to Berkshire Hathaway investors explains how to use fear to your benefit. The second piece comes from Jim Gallagher, a personal finance columnist, it is here: 23 years of personal finance wisdom distilled into one final column. Before this one gets too dated I figure why not share Jeff Gundlach’s mid-January opinion piece. Here’s Jeff Gundlach’s full presentation on expensive stocks, the economy under Trump, and the Federal Reserve

Financial Wisdom: Always optimize the incentives Government provides.
I will start by saying Social Security is not given to you by Government, you fund and earn it. Still, there is an art to extracting the most value. This is the surefire way to maximize your Social Security benefits

Another really popular topic here is Health Savings Accounts (HSAs). We will not rest on this one until you fully appreciate the value of these. How Health Savings Accounts Work

Financial Wisdom: You need to be very, very attentive to your longevity risk.
You saw it above in the piece on Social Security and this article, too, deals squarely with longevity risk. Many find fault with annuities as a solution, but the guarantees have value and should not be dismissed. The biggest problem with traditional retirement planning

Financial Wisdom: Invest as wisely as you possibly can.
One thing vital to your planning is to understand that it is never a ‘set it and forget it’ process. This article helps drive that point home. Investor’s Alpha: Proper Asset Allocation
Then again, things are subject to change … what impact will Artificial Intelligence have on individual retirement investing? This article may give you some insight and hope. Artificial Intelligence Hedge Funds Outperforming Humans
Investing wisely also means being aware of your environment. This article, just published this morning, shares a Monte Carlo simulation for market performance in March. As with all prognostications, take it for what it is worth, but it is fascinating. I recommend reading it through. A Monte Carlo Simulation of the S&P 500 for March 2017

Election Madness

Indeed, about mid-way between the Iowa Caucuses and New Hampshire Primary, we have seen an already raucous and unique primary season turn to true election madness.
The Iowa Caucuses delivered on a host of fronts, from a unique partnership with Microsoft to deliver app based election returns to not adequately staffing certain precincts to ‘coin toss’ decision making and ‘tell Carson supporters that he’s dropping out, so switch to us’ tactics. Democratic debate night: The first one-on-one clash leaves Hillary Clinton stumbling on Wall Street Who won the New Hampshire Democratic debate? The Politico Wrongometer The fury of Ben Carson Iowa governor slams Ted Cruz for ‘unethical and unfair’ tactics Bloomberg could be a ‘serious contender’ in 2016, his pollster says

Not one to let you forget your retirement savings, some timely guidance from around the web.
Our last installment zeroed in on dividend stocks as a strategy, here is some more background for you on the approach. Ponder the Future of Your Dividend Growth Stocks Dividends: A Key Component of Total Return 20 dividend stocks that Wall Street loves the most
I have paraphrased Warren Buffett before on this very quote, but the idea is ‘don’t save what you don’t spend, spend what you don’t save.’ That’s the key in the so called accumulation phase – your earning years, pre-retirement. Then, though, you have to become a spender, and making the transition can be difficult. Turning a Saver Into a Spender in Retirement and Spending and Saving in Retirement

Lest you think I forgot the world economy, it still moves along in pretty much the same way.
China is releasing an important data set tomorrow, about its currency surplus. A Preview of This Weekend’s Event that Could Unleash a “Vicious Bear Market Rally”
How about here, at home, how is the US economy doing? Economy added 151,000 jobs in January That sounds good enough, but it isn’t.

I think it is overdue to have some levity here, so here is some miscellany:
First, with the Super Bowl this weekend, how about a preview of games to come? Microsoft Offers Tantalizing Glimpse of HoloLens-Powered Super Bowl
Even some travel tips for you this week: Lonely Planet Releases Travel Guides to 38 Cities – For Free

Market mayhem

If everybody is thinking alike, then somebody isn’t thinking.” Gen. George S. Patton

The market mayhem continues pretty much unabated since the beginning of the year. Today the Dow is down significantly – over 2%. So, what may be driving this, and will it continue?

One obvious answer to what is driving this, China. How China accumulated $28 trillion in debt in such a short time Government intervention is the only thing keeping China’s stock market afloat

Then there is the market at home, is there simply a problem with fundamentals? A Year of Living Technically: Charting the Markets of 2015 (I urge you to look at the first chart, at least) Ralph Acampora: “We’re falling apart here and no one seems that worried.” US stocks suffer their worst first week since records began

Now that your head is spinning from the current state of markets, let’s focus back on the long term, your retirement:
I will start, as always, with fees. The Huge 401(k) Hit You Can Avoid Do you know where your 401(k) fees are hiding? Of course, it can’t always be that simple. New 401(k) suit targets Vanguard fund fees

How about some simple advice? You may not agree, or may not follow these, but they tend to be pretty sound. Everything You Need to Know About Money on One Index Card Warren Buffett’s 15-Minute Retirement Plan 7 Personal Finance Lessons from Bruce Lee

Another great idea on retirement, know your way around the retirement playing field. Newly improved retirement tax rules Understanding the retiree benefits of HSAs

A couple of iPhone tips for the weekend:
Everyone with an iPhone will like this trick. How to Force-Refresh the iOS App Store on iPhone or iPad This hidden iPhone trick does wonders to speed up your phone

World economic overview

You know that retirement is coming. It isn’t as though it just shows up one day and takes you by surprise, so you need to get ready for it.” Batya Shevich, Warren Buffett: To Be Rich And Successful Is Easy!

With the Federal Open Market Committee raising the Federal Funds Rate for the first time in nearly a decade, it seems like a good time to take a clear headed economic overview.
Now, the Fed move is largely predicated on a robust employment market and related risk of inflationary pressure. Put that in the context of oil & gas and commodities falling through the floor, and you tend to think like Canada. So, what are equity markets telling us? Here are two opposing views: Why Stocks Need to be a Big Part of Your Portfolio in 2016 tells a tale of a failing bond market and focus on consistent dividend paying stocks, but then “Coppock Guide” Signals a Bear Market is at Hand tells a fascinatingly wonkish look at market tops over a very long time. Both articles are worth your time.
This came in advance of the rate hike, but the read is still worthwhile, bottom line: even a small rate hike, if Japan’s experience is any guide, will be difficult to hold. The Simple Explanation Why There is No Such Thing as a “Dovish Rate Hike”
This rate hike occurs in the face of a largely negative rate environment in the EU, and our friends to the North looking in that direction as well. That, I suppose, would presage good investment news for the US economy, but it does feel odd as the high rate outlier. The Next Domino: Canada and The Bank of Canada just said the 3 most controversial words in central banking: ‘negative interest rates’
I would be remiss if I did not tee up the downside potential, and this is a decent list of hot spots around the globe. A Pessimist’s Guide to 2016: When Everything That Can Go Wrong, Does Go Wrong

No matter what happens to global markets, you still want to retire, right?:
Knowing plenty of people who fall prey to the morning coffee routine, or picking up a quick lunch, I thought this was a great read. Cutting Back on Lunch and Coffee Could Save You $700,000 In other words, that Starbucks Grande is costing you a lot of retirement flexibility.
In the same vein, nine more ways you can save more. I’ll paraphrase here a Warren Buffett quote, don’t save what you don’t spend, spend what you don’t save. 9 Ways to Stop Wasting Money Now
Since I’m on a roll here, let’s not forget the impact fees have on your retirement accounts. This is a great story about how Vanguard single handedly is changing the landscape. The Company That’s a Bigger Threat to Wall Street than Occupy
While this does not play directly into your retirement, knowing this may have some meaningful implications for how you think about investing and it is a fascinating component of any global economic overview. These 2 charts basically tell the entire global demographic story
A friendly reminder about healthcare cost in retirement, it really is a big issue, and you really do have to be prepared for it. Health Care in Retirement Will Cost How Much?

Miscellany to lighten your mental load:
Everyone with an iPhone will like this trick. Make Your iPhone Faster With This One Simple Trick
Here is the convergence of two recurring topics here: travel and saving money. The 11 most underrated ski resorts in America
This is a little heavier, sorry, but it is really interesting, too. History in the remaking

Understand the global economy

A good leader is a person who takes a little more than his share of the blame and little less than his share of the credit.” – unknown

Understand the global economy to improve your retirement

The Economy –a toe-dip into the world of macroeconomics, join me:
A fascinating look behind the curtain at the latest jobs report: it’s not pretty. Just one excerpt should cause you to read this: “when it comes to full time jobs there are still 1.1 million fewer now than at the pre-crisis peak in Q4 2007.” Wall Street is One Sick Puppy
On a related note, have a look at just how much the Fed tampering with markets has driven the sustained bull market … are you ready for the Fed to stop? The QE Era
If that all were not unnerving enough for you, try this one on for size. Again linking the market performance to QE, he goes one step farther to introduce global GDP growth. “Hedge!”
Keeping in mind the anemic GDP growth noted above, this author highlights the US reliance on inventory build to get even to that level growth. Biggest Inventory Build in History Prevents Total Collapse of the US Economy
Here is a fascinating, somewhat contrary view, which brings yet another variable into the discussion, “shadow banking.” This author argues that shadow banking will force the Fed to continue with QE, and that it provides a deflationary counterbalance. Interesting. The Fed Has Another $3.9 Trillion in QE to Go (at least)

Retirement security – be prepared, be alert, listen:
Never a bad idea to take a quick quiz checking your readiness. Answer These 10 Questions to See if You’re on Track to Retirement
It is always worth heeding the advice of the sage. A Dozen Things Taught by Warren Buffett in his 50th Anniversary Letter that will Benefit Ordinary Investors
Perhaps this belongs in another category, but it highlights a growing retirement concern, longevity risk. It is also why I favor ‘longevity insurance’ or deferred immediate annuities as part of the retirement solution. Calculated Risk: The Projected Improvement in Life Expectancy

Leadership tips –short, insightful lists for your consideration:
I love this one, hits on my favorite key themes. What Makes a Great Leader?: 5 Traits of Successful Leaders
Another one wholly in line with my beliefs. 12 Ways to Become a Charismatic Leader

Travel tips – save money for your retirement, but still have fun:
Use the right tools to get an edge. Finding Cheap Flights 101
More tools and tips to stay ahead. Secrets for cheap airline tickets
Most importantly, don’t be proud….New Terms with the $400 British Airways AARP Discount?

Retirement security is your responsibility

“If your actions inspire others to dream more, learn more, do more and become more, you are a leader.” – John Quincy Adams

Retirement security – watch the fundamentals and use the best tools:
This is short, and brilliant. Read it for your own retirement security. Time to kill the 4 percent rule?
You probably need help with your retirement security. So, this is worth reading, too. 4 Questions Everyone Must Ask Their Retirement Advisor
You have seen much about Smart Beta here, and elsewhere. The first article helps explain it a bit more, and the second highlights a current winner in the space. Why ‘smart beta’ strategies deserve all the attention and assets they’re attracting DoubleLine’s Shiller CAPE fund beating rivals while adding smart alpha to smart beta
If you really want to roll up your sleeves, consider this: 30 Years Ago Warren Buffett Gave Away the Secret to Good Investing and Correctly Predicted No One Would Listen

Leadership tips –the Pope again, seriously, and more:
That’s right, back to Pope Francis, this time in the Harvard Business Review sharing views on leadership diseases. You may not agree with them all, but you cannot deny having seen some of them. The 15 Diseases of Leadership, According to Pope Francis
He’s not the Pope, but Jack Welch delivered unparalleled results during his tenure leading GE. That’s worth considering. Top 10 lessons from Jack Welch

Travel tips – with the Dollar strong, Europe’s cheaper, think about it:
Some great spots on this list, focused on leveraging the strong Dollar. 35 Places to Visit While the Euro is at an 11-Year Low
I love finding hidden gems, and this list is chock full. 10 Insanely Gorgeous, Under-the-Radar European Destinations


“I checked the actuarial tables, and the lowest death rate is among 6-year-olds. So I decided to eat like [one],” – Warren Buffett on his diet

Self-improvement: in line with some of the best quality thinking, today we redesign our weekly post to give you better information, more clearly. Hopefully, we will find an interesting quote, too.

Another Steve Jobs reference, seems we shared a birthday. Steve Jobs would have turned 60 today. Here are 15 of his most inspiring quotes.
Some quick food for thought: Four Leadership Traits to Win in Business Today
I really like this one; short and to the point. 10 Ways to be easy to follow
Another article in line with my own philosophy. 6 Ways Vision Will Inspire Your Employees and Culture

As you know, this is the key to it all, making your retirement savings last. How to Turn Your Retirement Savings Into Retirement Income
More interesting insight on active vs. passive management in the fund world: Why Active Management Fell Off a Cliff – Perhaps Permanently
I mention deferred income annuities, or QLACs, often here. Now some guidance on what it means for your retirement planning. How QLACs are changing the Social Security timing game

This tool has been around for a while, as ITA Matrix, and it’s great. Google officially launches Flights, their Search-friendly travel tool
With all the complexity of airline pricing, you need help, and while Google Flights is a great start, this is a good companion. New Hopper App Predicts Airfare Prices, Alerts When to Book
There’s no question, being pleasant helps a lot in these cases. Still, be prepared: How to get on an earlier flight without paying a fee