Vanguard and Dimensional Fund Advisors (Dimensional) both offer mutual funds that provide investors with broad exposure to various asset classes at a very low cost. However, there are important differences between the two fund families. But first, let’s start with a bit of history… Vanguard introduced the Vanguard 500 fund in 1975, becoming one of…
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I had a discussion with someone about the recent stock market decline and he observed that despite the drop in stock prices, corporations seemed to be healthy and were still making lots of profits. He then said: “That’s what I don’t get. How can the market go down so far and so fast, when nothing…
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The “yield curve” is a term that is used frequently when discussing the state of the economy. But what is a yield curve to begin with, and what does it have to do with you and your investments? Yield curves typically depict the various yields across the range of maturities for a particular bond class.…
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Interest rates and bonds prices are inversely related; when interest rates rise, the value of a bond falls. Given that rates on US Treasury Bonds have climbed to levels we have not seen since 2011, bond prices are down year to date. As of November 1, 2018, the YTD returns on the Vanguard Total Bond…
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Most of us have heard of asset allocation – the process of dividing a portfolio’s assets across various parts of the market according to an investment plan that takes into account an investors goals and risk tolerance. Asset location, on the other hand, is a tax minimization strategy that takes into account how different…
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We all know that to receive a return on your investment, first you must invest and then, you must stay invested. Investing 101 teaches us that risk and return are related – to earn returns, you must put your assets at risk in ventures that are expected to compensate you for your faith that they…
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As an investor, it’s perfectly natural to ask, how are my investments doing? Most people look at their account values and if they are up, they are happy and if they are down, they begin to ask questions. But if you really want to know how your investments are doing, you need to consider how…
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One of the major changes resulting from the passage of the Tax Cuts and Jobs Act was the elimination of all miscellaneous itemized deductions. This category of deductions included unreimbursed job expenses, tax preparation fees, and investment advisory fees.
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It’s been approximately a decade since the Great Recession began. By year-end 2008, the Fed had lowered the target federal funds rate to almost zero and embarked on an aggressive quantitative easing campaign. Now, after several years of economic recovery, the Fed has begun to reverse course, restoring its policies and targets closer to historical “norms” through quantitative tightening and gradually rising interest rates.
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Your investment portfolio is most likely comprised of different types of investments, balanced in such a way that takes into consideration both your overall return objectives as well as your risk tolerance. It is useful to understand the purpose and role each investment plays within a diversified, balanced portfolio. Stocks or equity, whether owned through…
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