"Recession" ... its a word that strikes fear in the hearts of investors both young and old. Generally, when a recession hits, you know what you're in for. The stock market tanks, your 401(k) loses value, businesses you know and love close, and major media is in a frenzy every day about the latest financial disaster to strike. The NBER (National Bureau of Economic Research) defines a recession as "a significant decline in economic activity spread across the economy, lasting more than two quarters which is 6 months, normally visible in real gross domestic product (GDP), real income, employment, industrial production, and wholesale-retail sales. To date, there have been 47 recessions in the United States since the Articles of … [Read more...] about How to Invest During a Recession and Actually Make More Money
Stocks & Investing
When it comes to planning for retirement and diversifying your investments, these days your choices pretty much fall between one of two major options – the ETF vs mutual fund. Recently while rolling over my old 401(k) to an IRA with Vanguard, I had to make a very big decision as to which way I wanted to go. I could stick with their low cost mutual funds which I was very familiar with. Or I had the option to pick commission free ETF’s. Having six figures of retirement savings, this was in no way a decision to be taken lightly! Choosing the right type of funds could mean saving myself thousands and thousands of dollars in unwanted expenses or trouble later on when I’m ready to start making withdraws from my funds. I’ve been an … [Read more...] about ETF vs Mutual Fund – Why My Money is with Mutual Funds
If passive index funds are the way to go, then why does anyone invest in actively managed funds at all? That was the question I received when I was trying to help someone pick some mutual funds for their 401(k) plan. It's definitely a good one to ask! Over the years, a seemingly growing number of academics and financial bloggers have really been showing their love for investing with passively managed index funds (myself included). With all the major advantages and benefits they point out, it sure seems like a no-brainer that this is the way to go. Yet, when you take a closer look at where the money is actually going, it may surprise you to learn that the numbers paint quite a different story. In the US, some $9.8 trillion in … [Read more...] about Why Do More People Invest In Actively Managed Funds vs Passive Index Funds?
How can the average person become rich as fast as possible? You might think you need to be some kind of stock-picking wizard, or that you need a "guy" to manage your money for you. But in reality, that's often not the case at all. Study nearly any early retirement story and you will find that the truth is painfully very simple: To get rich faster, you need to save more money. A LOT MORE money! So then: Why does everyone focus on investing over the actual act of saving? While investing is a VERY important part of growing your wealth and eventually turning it into passive income, there is a limit. As we'll talk about more later in the post, history has taught us that there is an upper limit to what the average person can expect for … [Read more...] about What’s the Fastest Way to Get Rich? Simple: Save MORE!
Ever since reading “The 3 Percent Signal” by Jason Kelley (and unfortunately de-bunking its claims in my post here), I’ve been very curious about whether or not buy and sell signals for stocks really exist or not. For anyone who doesn’t remember, the 3 Percent Signal was an interesting concept where you effectively buy or sell shares of an ETF to effectively lock yourself into a 3% gain per quarter. I, unfortunately, somewhat fount this strategy to be a bust when I tried to validate it by reproducing the results. At its basic level, I do believe there is some merit to a “buying or selling stocks when the price is low or high enough” theory. After all, isn't it all just math; small gains here and there that add up over … [Read more...] about Do Buy and Sell Signals for Stocks Really Exist? The 10% Experiment
Recently I just finished the book “The 3% Signal” by Jason Kelly. As you can read in my book review here, the premise of The 3% Signal is to offer the common man a “simple” strategy for investing that (in theory) has the potential to beat traditional index fund investing! I’ll admit it – this book was scratching me right where I itch! I’m a huge sucker for mathematical-based approaches to investing and optimizing your personal finances. (When I say that, someone like Michael Kitces or Wade Pfau comes to mind.) If you’ve got the right numbers and figures to provide as evidence for your strategy, then I’ll have no trouble giving your research an honest, worth-while listen. More so, even though I recognize and believe in the power of … [Read more...] about Does the 3% Signal Investment Strategy Really Work?
MMD: Today we have a mega guest post from fellow personal finance blogger ARB. Take it away! Hello, readers of My Money Design! I am ARB, the Angry Retail Banker! Over on my blog, I offer what I call “An Insider's Take On Retail Banking”, which means that between bouts of raging out and threatening my entire customer base with physical harm, I talk about both life as a branch banker and ways for you to maximize your banking relationship. I am here today to talk about absolutely none of that stuff. Before you all hit the back button on your browser and type “funny cat videos” into a Google search, know that I'd like to discuss an awesome form of passive income that I think doesn't get covered a whole lot. I'm talking about … [Read more...] about Countering The Arguments Against P2P Lending
What holds you back from investing? Is it stocks? Do they scare you to death? If they do, I really don’t blame you. All the “ifs” in the beginning can be overwhelming! Which ones do I pick? Where will I find the right stock metrics and information to tell me? Why do they keep bouncing around in price? How long until I have a heart-attack? Would you prefer a way to “stick your toe in the water” and not have to deal with such wild fluctuations? If so, then let me introduce you to the world of mutual funds. “What are mutual funds” you ask? Well, for starters, they are where I started when I first invested – long before I ever bought my first shares of individual stock. But even today, after everything else I’ve learned, … [Read more...] about What are Mutual Funds and How Do I Invest in Them?