FVIM's Insights

News and information about preserving your life savings

Investing for What It's Worth

Having begun his career with a “modest” inheritance of around $100 million, is Donald Trump now worth $3–4 billion, or in excess of $10 billion? As described in this article by Reuters’ James Saft , it depends on whether the media’s estimates or Trump’s own proclamations are closer to the truth. For practical purposes, it’s a moot point either way. Of greater interest, Saft’s article also explored an alternate universe, in which Trump decides to skip all of his high-profile business dealings, plop his original nest egg into a basic, index-based investment strategy and let the market do the heavy lifting...
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Dividend-Paying Stocks and Other Mental Math Tricks

We hear this one a lot: Preserve your principal and live off of the proceeds in retirement . When interest rates disappoint, this often translates into investing in dividend-paying stocks instead. Unfortunately, while a focus on dividend stocks may be a common denominator found in many retirees’ investment equations, the logic doesn’t quite add up. Let’s go over why this is so, and why there may be better ways to both preserve and enjoy your total wealth. Money = Money It’s true that the notion of “principal” versus “interest” versus “dividends” can make for convenient mental accounting when managing your money....
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Fed Forecasts and Investor Mishaps

The can-do spirit dies hard in us Americans, and usually that’s a good thing. But when applied to investing, active energy is less advisable, especially if it involves trying to outsmart the market by chasing expert forecasts. Hopefully, you’ve already figured out that you’re best off ignoring the garden-variety talking heads like Jim Cramer and his ilk as more flash than substance. But what about those super-powered Federal Reserve chairmen and chairwomen? If anyone could see what’s coming in the market, shouldn’t it be they, who not only have their finger on the pulse but are actually responsible for regulating the...
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Can You Handle the Truth About Tracking Error?

To a point, I'm glad that the current market climate (at least as we write) has caused some investors' globally diversified portfolios to underperform the familiar S&P 500 Index this year. Why might this make me happy? It could be the best, "tough love" learning experience ever if you can handle the truth, which is as follows: The difference between planning for the atypical market risk inherent to diversified investing and experiencing the actual pain when it occurs reminds me of a quote from heavyweight champion Mike Tyson (who certainly knows his way around pain): "Everybody has a plan until they...
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