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When will small be BIG again? In theory, higher r When will small be BIG again?

In theory, higher risk assets should offer higher returns. Smaller companies (small caps) have however performed far worse compared to large caps. In fact, so far this year, the larger the company, the better its returns. Small caps currently struggle due to higher interest rates and a slowing global economy, already resulting in more bankruptcies. Investors therefore prefer stable companies with robust balance sheets. When better days for the economy are ahead, small caps will at some point represent a compelling investment opportunity, but they may continue to be under pressure for a while.

#russel2000 #SPY #SPX #DJIA #bonds #treasuries #diversification #mutualfund #recession #investing #invest #investors #financialliteracy #etf #stocks #stockmarket #FIRE #mutualfund #money #finance #howtoinvest #financialindependence #wealth #personalfinance #indexfund #bitcoin #income #retirement #trading

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Investing in stocks involves more risk than invest Investing in stocks involves more risk than investing in bonds. As a result, the potential reward should be higher. The equity risk premium measures this difference. It is the difference between the expected return (represented by the earnings yield on the S&P 500 (4.1%)) and the risk-free rate (represented by the yield on a 10-year treasury note (4.8%)). The current equity-risk premium is negative and the lowest in the last 15 years.

The risk premium can increase back to its historical average of 3% by 1) companies reporting higher earnings, 2) stock prices coming down, or 3) interest rates coming down. The fixed income spread gets worse when comparing the earnings yield to short-term treasuries (5.5%) or investment grade corporate bonds (6.5%). While fixed income has become increasingly attractive, low or negative equity risk premiums have historically not been a reliable signal to indicate future lower stock prices.

#fixedincome #cds #bonds #treasuries #diversification #mutualfund #valuation #recession #investing #invest #investors #financialliteracy #etf #stocks #stockmarket #FIRE #mutualfund #money #finance #investingforbeginners #investingtips #millionaire #howtoinvest #financialindependence #wealth #wealthbuilding #personalfinance #indexfund #income #retirement

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Retirement is a Math Problem, not an Age. 1) Dete Retirement is a Math Problem, not an Age.

1) Determine how much money you need to save for retirement. 

Estimate your annual expenses during retirement. Will you move to a different location? What are your health care needs? You should have at least 25 times your annual expenses to retire, and more if you do FIRE (Financial Independence, Retire Early). Use online retirement calculators to find out more, e.g.:
https://investor.vanguard.com/tools-calculators/retirement-income-calculator
https://www.schwab.com/retirement-planning-tools/retirement-calculator

2) Reduce spending and save and invest more to get to your retirement number quicker.

Budgeting allows you to have better control of your money and to prioritize investing. Review credit card statements for saving opportunities.

3) Maximize all workplace and other benefits.

Investigate your options regarding 401K, Roth IRA, 403b, 457b, etc. 

#retirement #retire #401K #RothIRA #realestate #florida #miami #ocean #diversification #mutualfund #valuation #investing #invest #investors #financialliteracy #stocks #stockmarket #FIRE #money #finance #investingforbeginners #investingtips #millionaire #howtoinvest #financialindependence #wealth #personalfinance #indexfund #investingeducation #income

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What is your conviction? Quadrant 1: Most beginne What is your conviction?

Quadrant 1: Most beginner/unsophisticated investors have this conviction. It is easy to sell to people, but close to impossible to deliver. Social Media is full of accounts taking advantage of people believing in quadrant 1.

Quadrant 2: The majority of Wall Street and its advisors have this conviction. A benefit is that it at least leads to some diversification. Social Media is full of accounts taking advantage of people believing in quadrant 2.

Quadrant 3: Very few people have this conviction. It is reserved for market-timing purists.

Quadrant 4: Investor education is needed to arrive at this quadrant. It is difficult to sell to people, but easy to deliver. Investors benefit from diversification but have to forego the thrill of dreaming about abnormal (positive) returns. It is counter-intuitive that the easy and lazy strategy is the winning one.

Post inspired by Roger Gibson’s Book: Asset Allocation: Balancing Financial Risks

#diversification #mutualfund #valuation #recession #investing #invest #investors #financialliteracy #etf #stocks #stockmarket #FIRE #mutualfund #money #finance #investingforbeginners #investingtips #millionaire #howtoinvest #financialindependence #wealth #wealthbuilding #personalfinance #indexfund #investingeducation #income #retirement #trading #allaboutmoneycommunity

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Ruth Handler (1916-2002) invented the Barbie doll Ruth Handler (1916-2002) invented the Barbie doll in 1959, and it went on sale for $3 (collectors now pay thousands for first edition Barbie dolls). “Don't dwell on what happened, no matter how bad it was. Find something else to do. Find something to do to help others.”

#quotes #oppenheimer #barbie #barbiedoll #barbiemovie #barbieandken #dollstagram #barbiegirl #diversification #valuation #investing #invest #investors #financialliteracy #etf #stocks #stockmarket #FIRE #mutualfund #money #finance #investingtips #millionaire #howtoinvest #wealth #wealthbuilding #personalfinance #indexfund #retirement #allaboutmoneycommunity

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High-yield savings accounts, Certificates of Depos High-yield savings accounts, Certificates of Deposit (CDs), or Money Market Funds are much better options compared to traditional low-interest savings accounts. High-yield savings accounts currently offer about 4.5% interest. While you need to maintain liquidity to pay your bills, many people keep too much money in their checking accounts. We are still used to the 0% interest rate years in which savings versus checking account did not make much of a difference. Good cash management matters and shows results over time.

#budgeting #money #financialliteracy #moneyprinciples #moneytips #investing #financialindependence #financialfreedom #financialliteracy #financialeducation #financialeducator #financialcounseling #savings #finance #financialwellbeing #financialwellness #banking #stocks #makemoney #debtfree #debtfreeliving #checking #moneymindset #moneyprinciples #saving #savingmoney #allaboutmoney #investments #etfs #retirement

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"The investor's chief problem – even his worst ene "The investor's chief problem - even his worst enemy - is likely to be himself." Benjamin Graham (1894 – 1976) is the ‘father’ of value investing and author of Security Analysis and The Intelligent Investor. His students included Warren Buffett and Sir John Templeton. Graham’s writings include many aspects of investor psychology. Rather than being rational and calculating, people often make financial decisions based on emotions and cognitive biases. The field of Behavioral Finance explains many of these biases.

#valueinvesting #diversification #mutualfund #valuation #recession #investing #invest #investors #financialliteracy #etf #stocks #stockmarket #FIRE #mutualfund #money #finance #investingforbeginners #investingtips #millionaire #howtoinvest #financialindependence #wealth #wealthbuilding #personalfinance #indexfund #investingeducation #income #retirement #trading #allaboutmoneycommunity

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Get into the habit of saving and investing by payi Get into the habit of saving and investing by paying yourself first. The easiest way to do this is to have your bank automatically deposit money from your paycheck into a high yield savings or investment account. You then use the remaining funds for everyday expenses. If you wait for “what is left” after spending, it can be challenging to find enough money to save and invest. This method reduces impulse spending, is low maintenance, and less involved compared to (even better) zero-based budgeting. Pay yourself first is a reverse budgeting strategy in which your spending plan is built around your saving and investment goals. Start conservatively to avoid overdraft fees and then increase amounts.

#diversification #mutualfund #valuation #recession #investing #invest #investors #financialliteracy #etf #stocks #stockmarket #FIRE #mutualfund #money #finance #investingforbeginners #investingtips #millionaire #howtoinvest #financialindependence #wealth #wealthbuilding #personalfinance #indexfund #investingeducation #income #retirement #trading #allaboutmoneycommunity

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“Most money managers have been losing the Money “Most money managers have been losing the Money Game. And they know it, even if they cannot admit it publicly.” Charles D. Ellis in Winning the Loser’s Game: Timeless Strategies for Successful Investing.

In his 1975 Article “The Loser’s Game”, Ellis argues that active portfolio managers are unable to beat their benchmarks and that investors are better off investing in low-cost index funds. Vanguard launched the first index fund in 1976.

#diversification #mutualfund #valuation #recession #investing #invest #investors #financialliteracy #etf #stocks #stockmarket #FIRE #mutualfund #money #finance #investingforbeginners #investingtips #millionaire #howtoinvest #financialindependence #wealth #wealthbuilding #personalfinance #indexfund #investingeducation #income #retirement #trading #allaboutmoneycommunity

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In the midst of a regulatory crypto crackdown, tra In the midst of a regulatory crypto crackdown, traditional finance (TradFi) giants push into crypto. Fidelity Digital Assets, Charles Schwab, and Citadel Securities launched EDX Markets this week, an institutional only crypto exchange. Following Blackrock’s recent Bitcoin ETF application, Invesco and WisdomTree just refiled their Bitcoin ETF applications. In its filing, Invesco argues that the lack of a spot bitcoin ETF pushed investors towards riskier alternatives and contributed to investor losses in FTX, Celsius Network, BlockFi, and Voyager Digital Holdings.

https://edxmarkets.com
https://www.sec.gov/ix?doc=/Archives/edgar/data/1850391/000121465923008647/p620230s1a2.htm
https://cdn.cboe.com/resources/regulation/rule_filings/pending/2023/SR-CboeBZX-2023-038.pdf

#crypto #bitcoinetf #cryptowinter #cryptocurrency #bitcoin #ether #etherium #blockchain #btc #solana #coinbase #cardano #nft #binance #cryptoinvesting #cryptoinvestor #cryptoexchange #cryptoassets #metamask #wallet #sec #trading #investing #etf #finance #wealth #personalfinance #retirement #stocks

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BlackRock, the world’s largest asset management BlackRock, the world’s largest asset management company, filed for a Bitcoin Exchange-Traded Fund (ETF) this Thursday (named iShares Bitcoin Trust). This would allow investors to get exposure to Bitcoin via their existing brokerage accounts rather than opening crypto exchange accounts and wallets. https://www.sec.gov/Archives/edgar/data/1980994/000143774923017574/bit20230608_s1.htm

For years, the SEC denied the applications for Bitcoin ETFs by other investment firms (e.g. Grayscale, VanEck, Fidelity, WisdomTree), referring to market manipulation concerns. BlackRock’s application includes a different structure though, and the firm may have found a way to consider the prior denials and get approval. While the SEC is unlikely to fast track this application, it is something to observe. The ETF may attract high interest given the SEC’s lawsuits against Binance and Coinbase.

#crypto #cryptowinter #cryptocurrency #bitcoin #ether #etherium #blockchain #btc #solana #coinbase #cardano #nft #binance #dogecoin #cryptoinvesting #cryptoinvestor #cryptoexchange #cryptoassets #metamask #wallet #sec #trading #investing #etf #finance #wealth #personalfinance #retirement #stocks #diversification

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As a result of the debt ceiling deal passed by Con As a result of the debt ceiling deal passed by Congress on June 2, 2023, the student loan repayment pause will end 60 days after June 30, 2023, so after a 3+ year break, payments are restarting soon. Don’t base your financial planning on Biden’s student debt cancellation plan as it is still under review at the Supreme Court. Payments were originally scheduled to restart 60 days after the Supreme Court decision, but the debt ceiling deal provides a definite start date for repayments if the Supreme Court does not provide a decision before June 30, 2023. Plan early and conservatively and start putting money aside now. Low income earners can apply for income-driven repayment plans (https://studentaid.gov/manage-loans/repayment/plans/income-driven). 

Log into your https://studentaid.gov account and find your student loan servicer (which may have changed during forbearance). Make sure all information is correct.

#student #loan #studentloan #education #school #college #credit #university #forgiveness #diversification #mutualfund #valuation #recession #investing #invest #investors #financialliteracy #stocks #money #finance #investingtips #millionaire #howtoinvest #financialindependence #wealth #wealthbuilding #personalfinance #indexfund #income #retirement

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Napoleon Hill (1883 – 1970) was an American self-h Napoleon Hill (1883 - 1970) was an American self-help author and a controversial figure. His books ignore systemic reasons for poverty and propose the power of positive thoughts as a pathway to economic success via entrepreneurship.

For investors, the desire to learn about personal finance and the creation of a plan are necessary components. Investors can not succeed without a plan. A plan includes an assessment of risk preferences and goals, diversification into different asset classes, and periodic reviews. Comprehensive financial planning includes much more, including budgeting, emergency funds, debt reduction, retirement planning, insurance coverage, and estate planning.

#moneyquotes #thinkandgrowrich #inspiringquotes #successquotes #philosophy #moneymindset #money #investing #investment #retirement #FIRE ##financialliteracy #financialfreedom #financialeducation #money #moneyprinciples #moneymindset #financialfreedom #financialliteracy #success #wealthbuilding #wealthmindset #wealth #debtfree #moneymindset #moneyprinciples #moneytips #saving #savingmoney #allaboutmoneycommunity

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Investment companies tend to promote funds with gr Investment companies tend to promote funds with great short-term past performance and at the same time include a disclaimer in the small print stating that past performance is no guarantee for future performance. The best performing funds are rarely able to repeat their success in subsequent years. Investors should rather look at all fund expenses, the turnover ratio (avoid large turnover funds), performance against benchmark, alignment to personal risk tolerance, asset allocation and overlap with other investments, investment objective, and the tenure and quality of the management team. As only few mutual funds are able to beat their benchmark, consider low-cost index funds as an alternative.

#diversification #mutualfund #valuation #recession #investing #invest #investors #financialliteracy #etf #stocks #stockmarket #FIRE #mutualfund #money #finance #investingforbeginners #investingtips #millionaire #howtoinvest #financialindependence #wealth #wealthbuilding #personalfinance #indexfund #investingeducation #income #retirement #trading #allaboutmoneycommunity

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Getting asset allocation and costs right accounts Getting asset allocation and costs right accounts for the majority of your overall investment success.  Asset Allocation means appropriate diversification across different asset classes. Cost means to understand and reduce investment fees as much as possible. Low-cost index funds can work well to address both issues.

#diversification #valuation #investing #invest #investors #financialliteracy #etf #stocks #stockmarket #FIRE #mutualfund #money #finance #investingforbeginners #investingtips #millionaire #howtoinvest #financialindependence #wealth #wealthbuilding #personalfinance #indexfund #investingeducation #income #retirement #trading #allaboutmoneycommunity #trading #crypto #passiveincome

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The Top 5 contributors to the S&P 500 (Apple, Micr The Top 5 contributors to the S&P 500 (Apple, Microsoft, Nvidia, Meta, and Amazon) provided 75% of its returns this year. The Top 10 contributors provided 86% of the S&P 500 return. This is a market breadth issue and reveals that most stocks are not performing that well, even though the index has been rising. Bears argue that the market has a problem when these 10 stocks stop going up. Bulls argue that it's time for the other stocks to catch up and for the top 10 contributors to get even stronger. Which side are you on?

#marketbreadth #stockpicking #diversification #valuation #recession #investing #invest #investors #financialliteracy #etf #stocks #stockmarket #FIRE #mutualfund #money #finance #investingforbeginners #investingtips #millionaire #howtoinvest #financialindependence #wealth #wealthbuilding #personalfinance #indexfund #investingeducation #income #retirement #trading #allaboutmoneycommunity

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Many people looking to invest are focused on speci Many people looking to invest are focused on specific products or stocks rather than considering their overall investment strategy. Your risk preference and diversification determine asset classes. You then build your portfolio, and the very last step is to choose financial products.  Financial success does not happen by focusing on products.  Commission-based investment advisors are often too focused on specific products as well.

#diversification #valuation #recession #investing #invest #investors #financialliteracy #etf #stocks #stockmarket #FIRE #mutualfund #money #finance #investingforbeginners #investingtips #millionaire #howtoinvest #financialindependence #wealth #wealthbuilding #personalfinance #indexfund #investingeducation #income #retirement #trading #allaboutmoneycommunity

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Our financial decisions are often related to our c Our financial decisions are often related to our childhood experiences with money.  Understanding your family money history and your money type will help you make better money decisions. Murphy further states: “When your Financial Life is guided by your true self and your life’s passion, you will no longer surrender your personal power to money. You will know in your heart that happiness isn’t purchased; it blooms from within, like a brilliant and beautiful flower.” Do you agree?

#moneyquotes #inspiringquotes #successquotes #philosophy #moneymindset #money #investing #investment #retirement #FIRE ##financialliteracy #financialfreedom #financialeducation #money #moneyprinciples #moneymindset #financialfreedom #financialliteracy #success #wealthbuilding #wealthmindset #wealth #debtfree #moneymindset #moneyprinciples #moneytips #saving #savingmoney #allaboutmoneycommunity #taxation

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Ramit Sethi works with people to help them achieve Ramit Sethi works with people to help them achieve their rich lives.  Ramit asks them to define what their goals are and then suggests changes to achieve them.  

#ramit #howtogetrich #moneymindset #budgeting #money #financialliteracy #moneyprinciples #moneytips #investing #financialindependence #financialfreedom #financialeducation #financialeducator #retirement #financialempowerment #finance #financialwellbeing #financialwellness #financialmanagement #financialgrowth #makemoney #debtfree #debtfreeliving #moneyadvice #moneymindset #moneyprinciples #saving #crypto #allaboutmoney

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