Rates that Set Alarm Bells Ringing
Top 5 of the Week of November 26
Anthony Isola heads up our Top 5 this week from his blog, A Teachable Moment, with a look at NFL finance. James Osborne of Bason Asset Management considers a fundamental issue with investing. And Jared Dillian, writing for Bloomberg, discusses the controversy behind the “Financial Independence, Retire Early” folks.
And The Financial Bodyguard Carolyn Gowen urges us to carefully examine anything with above average return rates. And from ETF.com, senior staff writer Lara Crigger answers Gen Z’s questions about ETFs…
Football & Finance
- Skill, fame, and fortune don’t always correlate with sound financial planning and implementation
- Which is how some NFL players have fallen prey to predatory disingenuous financial advisors
- Thankfully, there are those who’ve learned from their own mistakes who are on hand to help their team players discover the power of compounding interest—passing the knowledge on from player to player
A Universal Truth
- Around 18 months ago, you would have struggled to find anyone who had a portfolio complaint—everything in the market was up
- This year though, any investor with a diversified portfolio is pulling their hair out, despite the S&P 500 “still crushing it”
- But choosing to invest in the best performing asset class only is also a trap, as shown in October when the S&P 500 dropped by 6.9%, so being diversified is a must
- Which is why, whatever else changes, investing is still hard
A Controversy in the Making
- The state of the U.S. savings rate has been astonishingly low for a long time now, with little being done to change the current state of affairs
- The FIRE movement though proposes “radical savings” of 50% of your salary at the very initial stages of your life and career to be able to retire around 35-40
- There is controversy behind the ideals of the movement though, as it doesn’t really add up—to have a shorter career there has to be a trade-off in what you consume and how you live
Have you signed up to the FIRE way of thinking? Share your comments in the section below
Rates that Set Alarm Bells Ringing
- It’s hard to feel sympathy sometimes for victims of Ponzi schemes—anything offering you fixed returns way over the Federal Reserve’s current rate of 2.25% than you should be immediately wary
- Any professional advisor and money manager should see straight away that these promised returns are simply impossible
- Sadly, greed often drowns out such alarm bells, and sensible professionals are duped by carefully prepared, but much falsified paperwork
Answers to ETF Questions
- ETF’s share prices change due to supply and demand influences, though authorized participants make arbitrage trades to help keep the value in line with their net asset value
- Commodity ETFs aren’t necessarily riskier than other ETF types; the risks are just of a different type—depending on which kind you’re investing in
- It’s definitely possible to tax-loss harvest with ETFs (where you sell securities that have lost value to offset incurred taxes), especially as ETFs are very tax-friendly vehicles to begin with
Top 5 of the Week is a summarized collection of financial investment articles that we like and think you might like too. Having written thousands of pages of equity strategy and company research between us, we understand the allure of the ever-changing world of finance. Investing is an art form—and like everything, something you can work on and improve at. There are some excellent writers out there on the finance web, some offer a running commentary on today’s market, some are doing research, some have tips on how to Become a Better Investor, and some just lift the cloud of fog behind a lot of financial jargon. Each week we will keep you up to date with the top 5 articles worthy of your attention.
Anything you would like to discuss about this week’s top 5? Do you have another favorite that isn’t mentioned here? Feel free to add it below. Let’s start a discussion in the comments section!
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DISCLAIMER: This content is for information purposes only. It is not intended to be investment advice. Readers should not consider statements made by the author(s) as formal recommendations and should consult their financial advisor before making any investment decisions. While the information provided is believed to be accurate, it may include errors or inaccuracies. The author(s) cannot be held liable for any actions taken as a result of reading this article. The Become a Better Investor Team doesn’t necessarily endorse any stocks or shares mentioned in the articles or the author of such articles linked to and summarized in Top 5 of the Week and cannot guarantee the accuracy of its information.