What are the tangible and intangible factors that have contributed to long-term U.S. stock market outperformance compared to the rest of the world? Despite these advantages, why might we still want to continue to be globally diversified? Show Notes American productivity still leads the world—The Economist The Outlook for Long-Term Economic Growth by Charles I. Jones—Federal Reserve Bank of Kansas City How Much Will Global Warming Cool Global Growth? by Ishan B. Nath, Valerie … [Read more...]
464 Plus: Floating Rate Treasuries, Actively Managed Preferred Stock, Valuing Assets, and Individual Country ETFs
In Plus episode 464, we review how floating rate U.S. Treasury bonds are structured and why the iShares Floating Rate Treasury Bond ETF (TFLO) has a tiny bit of volatility compared to a money market mutual fund. Why different preferred stock issues from the same issuer have different yields. We discuss actively managed preferred stock strategies. Can we use the same methodology to value income-producing and non-income-producing assets? Do we need to invest in individual country ETFs to … [Read more...]
421: Beware of Survivorship Bias When Investing
Why long-term U.S. stock market outperformance could be because it has avoided major catastrophes. Does an over-reliance on historical U.S. stock returns when modeling retirement outcomes lead to spending rates that are too high? Topics covered include: Why you might consider earthquake insurance What is survivorship bias and what are some examples Why the U.S. is an outlier when it comes to stock market performance Why the 4% retirement spending rule might be too … [Read more...]
407 Plus: More on Annuities, Real Estate, Yield Curve, Strong Dollar, and Zombie Firms
In Plus Episode 407, we continue our discussion on fixed annuities and fixed index annuities. We discuss real estate crowdfunding platforms, inverted yield curves, Series I savings bonds, and is now a good time to invest outside the U.S. given the strong dollar. Finally, we explore what zombie firms are and whether they could cause a market crash. … [Read more...]
401: Why Diversifying Your Portfolio Feels Awful
Warren Buffet said, "Diversification makes very little sense for anyone that knows what they’re doing." He also said, "Diversification is a protection against ignorance..." Most of us need that protection against ignorance, yet diversification often makes us feel bad when some of our holdings don't do as well as others. We make the case why we should diversify anyway. Topics covered include: Warren Buffet says it's crazy to own more than 30 stocks, but Berkshire Hathaway owns 48 … [Read more...]
364: Should You Hedge Your International Stock Exposure Against Currency Fluctuations?
How to decide whether it is worth it to hedge currency exposure when investing outside of your home country. Topics covered include: How currency exchange rates impact investment returnsWhat factors impact currency exchange ratesWhat are carry trades and how do they influence exchange ratesHow currency forward contracts workHow ETFs and funds hedge currency exposureWhat to consider when deciding whether to hedge foreign currency exposure Show Notes Rising U.S. yields push yen … [Read more...]
210 Plus: June 2018 Mid Month Update and Investing In Colombia
This week June 23, 2018, we review current investment conditions, which are starting to show the impact of the trade war. We discuss the upcoming closure of of the iShares Currency Hedged MSCI All Country World ETF (HACW). We also explore what to look for when investing in a smaller country like Colombia. … [Read more...]
209 Plus: How Much International? and 3 Simple Rules of Investing
This week June 16, 2018, we review an article by Vanguard on how much to allocate to international investing. We also review a book on the Three Simple Rules of Investing, including discussing asset allocation, single premium immediate annuities, spending rates, rebalancing and dollar cost averaging. … [Read more...]
209: Why Bother Investing Internationally?
Is it worth investing outside your home country given the risk? Should you hedge currency risk? What is the impact of Chinese "A" share listed companies being added to emerging market indices. Photo by Jacopo Marello In this episode you’ll learn: What are the risks of investing outside your home country.What is the main reason to invest internationally.How have valuations of stocks have changed since 1993.Why U.S. investors should consider hedging currency risk but … [Read more...]
MNY106 Plus: National Debt, Solar Bonds, Permanent Portfolios, Emerging Markets and Dissecting A Portfolio
This week on Money For the Rest of Us Plus we cover a number of different topics. I address hyperinflation and the national debt. I also answer questions on emerging market stocks, solar bonds and international stock exposure when implementing a Permanent Portfolio. I also analyze a member's asset allocation in his retirement account to estimate the expected return and risk and compare it to one of the Hub's model portfolios. The episode length is 24 minutes. … [Read more...]
