As we enter what feels like an unprecedented new year of volatility, market pressure, and uncertainty, many investors are on edge. Fear can cause many to lose their better judgement. In these moments, it is critical to focus on the long term and resist the temptation to try to time the market. Let’s sort through the noise, and put some of this recent volatility in perspective.Read More
Savant has always valued organizations and programs that align with our corporate values. Philanthropy is part of our culture; we believe it is good business to support the areas in which our clients, employees, and offices are located through charitable giving, corporate sponsorships, and volunteerism. One specific organization we are proud to sponsor is Badger Honor Flight. Through this sponsorship, Brent Lindell, a financial advisor in our Madison office, was given the opportunity to serve and honor veterans from WWII, Korea,Read More
First, I must disclose to you that I actually have three sons; each has his own personality and his own ambitions. It’s my oldest son, the quintessential student, who at the age of 14 already has a strong desire and motivation to attend Notre Dame. I’m not exactly sure why he became such a big fan of the school, either, other than the fact that he is a huge sports fan, and it might have to do with Notre Dame’sRead More
October 10th is my wife’s birthday. One birthday in particular will always stand out in my mind: October 10th, 2007. You see, this was the day the stock market took an extreme plunge, leading us into the dark period of ’07-’09. At the end of that very long day, I waited in line at a flower shop to get my wife a bouquet of flowers. I can still recall the question I was asking myself (in somewhat of aRead More
Here’s a trivia question to startle your friends with: According to International Monetary Fund (IMF) statistics, what country has the highest government debt levels, compared with its economic output, in the world?
You might be inclined to guess troubled or developing nations like the African nation of Eritrea (134% of its 2011 GDP), Lebanon (136%), or Jamaica (139%)–or, if you were aware that it existed, the sovereign nation of Saint Kitts and Nevis (153%), a former British colony isRead More
Large investment banks and brokerage firms are in the news again, with word that J.P. Morgan Chase suffered a $2 billion loss while trading for its own investment portfolio. If you’re inclined to be amused by such things, word had apparently leaked out weeks before the losses were spotted that a mysterious individual dubbed “The London Whale”–who we now know is Bruno Michel Iksil–was taking strangely large positions in credit default swaps linked to corporate bonds. OtherRead More
No, I’m not talking about a game – unless you think of credit scores as a game. Which, now that I think about it, might indeed be the case. Like any game, there is a list of rules, and it might be wise to become familiar with these rules because they are pertinent to your financial life.
Your FICO score (the most common credit score used) can help a lender evaluate the risks of extending credit or loaning money to people.Read More
It’s getting to be the time of year when people are thinking about adding to their IRA (Individual Retirement Account). This usually occurs around the end of the year up to the income tax filing date the following year (the norm is April 15th). Right now the rules say you can put in up to $5,000 (you can add another $1,000 if over age 50) if you have income, that income isn’t too high, and youRead More
Investing mistakes can cost you time and money (total return). If you confront the most obvious of these issues, you’ll put yourself 90% of the way home.
The feeling that “I’m missing out on great returns” has probably led to more bad investment decisions than any other single factor. Many investors select asset classes, strategies, managers and mutual funds based on recent strong performance. If a particular asset class, strategy or fund has done extremely well for three orRead More
Mutual funds are, by far, the most widely used investment vehicle of choice. There are thousands of them, and considering their use in 401k plans, they are the staple that people build their retirement goals upon. There are a few trends that are worth noting in the mutual fund industry as we look forward.
One of the most important trends is that funds investing primarily in large company stocks and that are actively managed (which means someoneRead More
People in the US have done a pretty good “about-face” in the last couple of years. Savings has gone up and spending has been somewhat curtailed in the face of the uncertain economy. Saving more and spending less is great – but, when it comes to investing, there are a few common mistakes people make time and again.
Loss Aversion. A common theme for investors is to hold on to a losing position (hoping it will bounce back). In fact, lossRead More
I’ve had a small black book in my possession for 8-9 years. No, it is not a list of past girlfriends; each page is devoted to a different part of my financial life or my plethora of passwords. Just to give a few examples:
One page is devoted to each life insurance policy I keep on my wife and I. I detail the issue date, policy number, annual premium, the term and the toll-free phone number for the insuranceRead More
If you are a regular reader of these blogs, you’ll notice ongoing references to costs. Costs are important because they directly lower returns. With this in mind, I’d like to share an interesting investment industry tactic that confuses investors.
Mutual funds dominate the investment world. They offer diversification and are easy to buy, sell, and own. Every mutual fund has costs detailed near the front of their prospectus. Too often, the same fund offers multiple variations withRead More
Nothing is easy in the current banking world and one of the latest casualties “waiting to happen” is the Home Equity Line of Credit (HELOC). Home equity lines have, for better or for worse, been a way to tap the equity in your home for things like remodeling or buying a car. Unfortunately, these home equity lines were also abused in the credit crunch we’ve seen. Now, even the homeowners in good financial standing are getting hit fromRead More
You hear about them every once in a while: the lady that worked an ordinary job and her estate left over $4 Million dollars to her favorite charity. How did she get there? Was she the recipient of a sizeable inheritance? How could she accumulate such a large chunk of money? Today’s environment finds many people struggling with personal financial issues. How about the other side of the coin: what traits can you develop to put yourself (andRead More
This is an interesting question that tends to come up more often when the market is experiencing volatility such as we’ve seen this year and the fourth quarter of 2007.
We are all probably familiar with FDIC (Federal Deposit Insurance Corporation), which insures all depositors of a member bank against loss up to a certain dollar amount. The FDIC’s approach to making depositors entirely whole makes sense in the risk-averse bank account world, but what about the world of the stockRead More
As you might have noticed in the news recently, there is a proliferation of discussion pertaining to Fannie Mae and Freddie Mac. Fannie Mae and Freddie Mac were both set up by the Federal Government – Fannie in 1938 and Freddie in 1970. Neither deals directly with homeowners. Just to give you a little history on how these two entities fit into the big picture, the following is a brief description of the Subprime debacle.
Lenders and banks drasticallyRead More
You may not always consider what your investments and values have in common.
It is possible to a lign your investment strategy to increase financial return and social good. This is called “socially responsible investing” (SRI) and it looks at the “bigger picture” when building a portfolio.
Instead of just identifying profitability, socially responsible investors look for companies that bolster environmental responsibility, diversity in the workplace, product safety, and quality. Likewise, a socially responsible investor may opt to avoid investing inRead More
In my last entry, I spent time on a few savvy tricks that parents can use to educate their younger kids to be smarter about money. The idea is not so much to turn them into money-saving automatons, but to start a learning curve. This time we are going to move up the ladder to older kids (middle and high school age).
In a 2006, the JumpStart Coalition for Personal Financial Literacy surveyed 5,000 high school seniors; the survey tested theirRead More
I have three sons, ages 8, 6, and 4. Long ago, my wife and I agreed on trying to impart to them sound building blocks for their future. Like most parents, we want polite, well mannered kids that have good study habits, play sports, go to college, etc. Another important aspect (since it just happens to be my vocation) is the understanding of personal finance and making sound decisions about money. I truly think that a curriculum ofRead More
We are in the heart of college football bowl season and right on the verge of the NFL playoffs. You hear a lot of talk by the commentators about winning coaches and the value they add. Interestingly enough, this logic of a “winning coach” doesn’t apply in the world of investing. Check out the attached video clip to see behind the scenes. Savant, long ago, decided to embrace the inherent efficiency that is the market.