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Bull Case / Bear Case

There are simply too many unknowns and outside factors that can impact the economy, markets, sectors, and companies to ever give yourself permission to have complete certainty about the future.

Sure, strong opinions are fine, but they better be weakly held because the markets are a humbling place if you’re not willing to look at both sides of an argument.

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What Happens When Stocks Make New Highs?

If you’re not a short-term trader, then you’ll see that all-time highs are nothing to fear. Returns are actually higher 6, 12, and 24 months out. This isn’t a shocking revelation. Rising prices attracts buyers, it’s that simple. All-time highs are not an all-clear signal, no such thing exists. But neither are they a sign that the rug is about to be pulled.

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The Pros and Cons of Miniscule Savings Account Yields

There are no easy answers when it comes to finding income in your portfolio these days. While it would be nice if retirees had the option of stashing their cash in a money market earning 5%, we have to invest in the markets as they are, not as we desire them to be. So today you pays your money and you takes your choice.

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Expect the Unexpected

2020 is teaching investors a lesson that should be apparent to all of us who watch the market closely: it is full of surprises. The best way to plan for surprises is to be ready for a wide range of outcomes.

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The Permanent Portfolio

Everything is working.

Whether you’re an equity investor, hiding out in bonds, or waiting for the dollar to collapse, you’re making money.

The permanent portfolio, which is an equal-weighting of everything from stocks to bonds, gold, and cash, just had its best run in 40 years!

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Five Thoughts on a World with No Yield

Rates are low for a reason. “Safe” bond yields at these levels are bound to have unintended consequences. Here are some thoughts on what this means for investors:
1. Savers shouldn’t expect much.
2. Borrowers are getting help.
3. Investible assets have to go somewhere.
4. Historical valuation tools will be harder to use.
5. Mini booms and busts may be here to stay.

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It Depends

“It depends” isn’t the advice most people want to hear when it comes to their finances or career or really any big life decision, but the world is rarely black or white when it comes to decision making under uncertainty.

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The Nifty Fifty and the Old Normal

Individual stocks are often more confusing than the market itself and can lead to some contradictory outcomes, depending on your time horizon and which types of stocks you’re looking at.

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Backtests vs. Real Life in the Markets

If you lived under a rock in 2020 and didn’t pay attention to what was going on around you, simply looking at the performance number of the overall market would make you think things have been relatively boring this year.

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The Diversification Drag and the Management of Luck

You have to account for luck in the investment process. No one can prepare for good luck, but there are ways to manage bad luck. Diversification is one of the best tools available to avoid allowing bad luck to give you extreme outcomes at the worst times.

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The Best Source of Investment Income?

Fundamentals are more complex than they seem. One of the simplest, yet most overlooked, stock market fundamentals is the dividend yield. Dividends also happen to be one of the most resilient features of the stock market over the long-term.

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What Happens to Stocks After a Big Up Month?

One hard part about investing during such highly volatile periods is you can talk yourself into just about any scenario. Sometimes these huge bounces are the real thing. Other times they’re a mirage. By studying historical downtrends and volatile markets, we learn that they tend to open you up to a wider range of outcomes, both to the downside and the upside.

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Which Portfolio is Right for You?

Which portfolio is right for you? The one that you can stick to. And to find the portfolio that you can stick to, you have to have some idea for the amount of risk you are willing to bear.

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More Thoughts On Possible Worst Case Scenarios for Diversified Portfolios

If you want to earn higher returns, you have to be willing to accept more volatility and higher losses. And, if you want to see less volatility and shallower losses, you will have to accept lower returns. Risk and rewards are still attached at the hip. Investors just have to get used to the fact that the rewards are going to be lower than they were in the past for a while.

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Making Sense of a Stock Market that Doesn't Make Any Sense

The stock market can be one of the most confusing places on earth. The worst thing you could do in an investing environment like this is assume there is only a singular path forward. The second worst thing you could do is assume you know exactly what that path is. The market is likely to continue confounding investors of all shapes and sizes so it’s best to keep an open mind from here.

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Different Strategies for Putting Cash to Work During a Bear Market

Lucky or good, sitting in cash is not a horrible position to be in, but it does present its own set of challenges. The thing you absolutely don’t want to do is become so attached to your cash that you never get back in. Cash is comfortable in a bear market, but if you get stuck there, you will regret it someday. Remember: no one perfectly times these decisions.

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The Wild World of Yield Chasing

There are no ironclad rules when it comes to investing. Everything has a caveat or exception. But the closest thing to an ironclad rule is that risk and reward are attached at the hip. You can’t expect to earn higher returns without accepting higher risk in one form or another. And, you can’t expect lower risk in one form or another without accepting lower returns.

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The Same, But Different

People in the same investments can have very different experiences.

If you’ve been investing since the '90s, you have now seen your third big market downturn. If you started any time in the last 10 years, you can now say you know what it feels like to be in a bear market, but only sort of.

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Would You Rather: Buy Too Early or Buy Too Late in a Bear Market?

Buying too early means you could experience some pain if stocks continue to fall further. Buying too late means you could experience some pain if stocks have already bounced.

The stock market is the ultimate place for regret because there is always reason to second-guess your decisions. But this only really matters for people who concern themselves with the short term.

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The Corona Crisis vs. The Great Depression

Making economic or market comparisons to the Great Depression is almost always ridiculous…until now, that is. The daily price swings we’ve seen in the last month were beginning to rival what happened during the 1929-1932 period. The worst 10 daily returns since the late 1920s are dominated by the Great Depression, 1987, the Great Financial Crisis, and this month.

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When Should I Rebalance?

A portfolio rebalance is simply the act of returning to your pre-determined asset allocation. For most people, this involves at least two asset classes, with an infinite way to slice and dice the portfolio.

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How Are Diversified Portfolios Holding Up During the Crash?

If you want higher returns, you must accept a higher probability of large losses or other unforeseen risks. And, if you want to dampen large losses, you must accept the prospect of lower returns. There is no stronger relationship in all of investing than risk and reward. And the whole point of asset allocation is calibrating your personal risk profile with your portfolio holdings.


Returns from the Bottom of Bear Markets

Will you invest at the absolute bottom? Not unless you’re ridiculously lucky. But the point remains that the bigger the losses, the higher the expected returns. This feels like an awful time to buy stocks. That’s usually a good sign.


What Happens After The Stock Market Falls?

Buy low, sell high. Even if you know nothing about investing, you’ve heard this phrase before. With the S&P 500<sup>®</sup> Index off its highs, investors have an opportunity to execute on the first half of that statement. As stocks decline, they become more dangerous in the short-run but more attractive over the long-run.


I'm Here to Remind You

You will see and hear amazing things today and this week—in stock prices, in oil prices, in government and central bank response. It's going to be a time you'll look back on. Unprecedented things are taking place. But I'm here to remind you of the things that are now still true and will always be true, regardless of what happens.

From Paycheck to Portfolio

A decline early in your retirement can have a big impact on the value of your nest egg. You’d have to draw down a larger portion of your portfolio to meet your income needs, while a decline that occurs later might be less hazardous to your wealth.

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Vital Signs_Tab

Brief and colorful insights focused on major market trends.

1,000 Words Tab

A picture is worth a thousand words. In each issue, we present one insight on a range of market, investment strategy, and behavioral topics. The 1000 Words Series is designed to provoke insightful and memorable conversations.

The Upside of Lower Downside

Investing may be simple, but it isn’t easy. We’re told to buy equities and hold them through good markets and bad. But few of us have the fortitude to calmly stay fully invested when prices are declining. When it comes to investing, your best offense is a great defense.

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Are Better Days Ahead?

History has shown that double-digit losses in equities have tended to be followed by periods of above-average performance. Having already suffered the decline, investors may be well-advised to stick around for the recovery.

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1,000 Words - The Spinning World

A globally diversified portfolio is important for those seeking strong investment performance. Diversification, however, is only effective when an investor is willing to own markets that have fallen “behind.”

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1,000 Words - Roller Coasters

Following the intense volatility of the great crisis in 2008-09, the bull market was mostly smooth sailing for a decade. The ebb and flow of volatility fits a broad historical pattern going back many decades. We do not know where the market will be tomorrow, next year, or next decade. Even so, investors should be respectful of long-standing market rhythms.

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1,000 Words - Odds Are

Trying to pick the best times to be in the market and when to be out is known as market timing. Unfortunately, trying to time the market to miss the lows means missing the highs too.

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Minds Over Markets

This guide strives to help you achieve better long-term financial outcomes. Its main message is that doing so is more about setting the right goals and controlling your own behavior than it is “beating the market.” We provide plenty of historical perspective on markets, but only in the service of confronting our natural tendencies to make poor decisions about money.

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Addressing Longevity Risk

With more and more people living longer than ever, the challenge will be not to run out of money as the need for monthly income grows. This longevity revolution will have a profound impact on people’s lives, their money, and the economy. The potential opportunities for financial advisors to help clients navigate such challenges will be remarkable.

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The Myth of Consistency

So much effort in investing goes toward "identifying winners." In the world of actively managed mutual funds, we search for managers who can outpace their peers and beat the market.

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The Active Investor's Field Guide

Recent financial innovations have created both a wealth of opportunity and an avalanche of complexity for investors. It has never been easier—or more overwhelming—to take investment risk. With complexity comes the need for simplification. How do investors cut through the noise and take control of their portfolios? This guide offers perspective on the so-called active and passive investing debate, with an eye toward prioritizing diversification, risk management, and investor behavior.

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What's Your Number?

There are four steps to calculating your "retirement number" - the number of dollars you most probably need as a sum of capital from which to draw a lifestyle-sustaining income without serious danger of running through the capital.

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Market leadership changes from year to year and predicting the winning style is impossible. These tables highlight the importance of diversification.