Rick Ferri, CFA, fields live audience questions on asset allocation, discussing the difference between one’s investing philosophy and their strategy, and more.
Investing
Should I Prepay My Mortgage If Interest Rates Are Increasing?
Calculations are needed to find out if making money by not prepaying a mortgage, but using cash to invest instead – would be profitable.
Tax-Loss Harvesting Treasury Bond Index Funds in 2022
Over the last 12 months, Vanguard’s Intermediate-Term Treasury fund (VGIT) has lost more than five percent (5%+) of its value. Long-term investors not phased by this short-term volatility can benefit from tax-loss harvesting.
The Diversification Myth of Alternative Investments: How Illiquidity is Mistaken for Low Correlation
Alternative investments are investments that are not stocks, bonds, or cash. The list of alternatives is endless: real estate, hedge funds, private equity, venture capital, timberland, fine art, farmland, reinsurance, private lending, and more. Alternatives are often pitched as a magical way to diversify an investment portfolio. They are said to be immune from the […]
More Risk for Less Return: Why Paying Off Debt – If Investing in Bonds – Make Sense; or Mortgage Arbitrage with Low Interest Rates
SUMMARY: Pay off debt if bonds make up any part of your investment portfolio. Even with a portfolio as aggressive as 90% stocks and just 10% bonds, anything with a non-zero interest rate should be paid off. This idea – to prepay debt if investing in bonds – comes as a surprise to those investors […]
Future Housing Returns are Stark
In the June 2021 issue of the Financial Planning Association’s Journal of Financial Planning, I wrote a short piece on housing. In the article, I pointed to the rise in prices. I argued that while housing has done well over the last couple of decades, that trend may not continue. Given that uncertainty, funding retirement […]