Calculations are needed to find out if making money by not prepaying a mortgage, but using cash to invest instead – would be profitable.
Investing
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 […]
Just Buy Value
I’ve had a couple of conversations with some lay investors of late. Both times, friends approached me with questions about investing. They were looking to profit off the pandemic, intrigued by the opportunity to buy certain stocks on the cheap. Travel and tourism stocks – they reasoned – were ripe for recovery (once the impacts […]