As you know, gains in your stock investments are not guaranteed, even though it may feel like it if you’ve been invested in the market for the last decade. Looking at the last five years, the S&P 500 index has increased an average of nearly 17% annually, with only minor corrections along the way. In fact the S&P 500 returns have been so consistent that most large cap equity funds haven’t been able to beat this performance. Over a five year period only 17.6% of large cap equity funds beat the S&P Index (see exhibit 1 below). In other words, if you had simply invested in the S&P 500 index then you would have done better than the majority of professional stock investment managers. But that’s not the end of the story. Even if you had invested in a fund that tracks the S&P 500 index, you still could have under-performed depending on the fees you paid to the investment company that managed your money. Continue reading “Don’t be passive when managing investment costs”
If you’ve been reading my recent articles you may sense a theme (or an obsession) with figuring out the costs and benefits of going to college. There are clearly benefits of going to college, but it is a ‘big money decision’ and should only be made with the appropriate level of due diligence.
While the decision about which school is the “best fit” is somewhat subjective, the cost of obtaining a diploma and how to pay for it should be viewed more objectively. Continue reading “3 questions every parent and child should answer before choosing a college”
If you read my prior post on developing financial know-how, then you’ll know that keeping up to date on personal finance news and information is one of the steps in the advancement cycle. The great thing is that in this age of online subscription services you can select topics that matter to you and have the information delivered directly to you. I have a few different information services that feed updates on personal finance to my email and Twitter accounts. These feeds provide information on a range of topics and are particularly useful if you are nearing a significant life goal like starting or changing careers, or deciding when and where to retire. I receive feeds from a number of different sources, including those specific to industries or technologies I’m following for investing purposes. It’s easy to get overloaded and overwhelmed with all of the different sources, so I recommend getting started with a few that allow you to better understand how to financially plan for life events, stay on top of your money, and comparison shop products and services.