Below is the text of a letter I sent to Washington, DC Mayor Muriel Bowser to reform the DC College Savings Plan to better serve the interest of DC families and college students. On August 1st, the DC CFO responded!! Dear Mayor Bowser: Your Administration would do college students and families saving for college a […]
A client recently asked me to provide a second opinion on the investment advice he had been receiving about his brokerage (taxable) and retirement accounts. He felt the 1.0% fee was high and he didn’t know what questions to ask to determine if the portfolio’s performance justified the fee. I was happy to help. I […]
There seems to be a never-ending stream of evidence that high mutual fund fees depress fund performance and hurt investors’ return. The most recent article in the popular press explains why high mutual fees can hurt performance. Two interesting facts stick out. 1. Mutual fund fees make the difference between under- and over-performing a benchmark. With […]
Target date funds have become very popular as a simple way to save for your retirement. You pick the target date fund with the date closest to when you plan to retire (e.g., 2025, 2040, etc.). The fund gradually increases the proportion of bonds compared to stocks as the target date approaches. Asset allocation – […]
Fidelity, Schwab, T Rowe Price, and Vanguard each offer index funds that cover the entire domestic and international stock markets and the domestic bond market. But which company’s index funds should you choose? Are they all the same? I look for index funds with the lowest expenses. Expenses over the long-term reduce the fund’s return. […]
I always thought that municipal bond funds were only for investors in upper income tax brackets. The lower interest rates that municipal bonds pay are offset by the fact that interest from these funds is tax exempt. Thus only high earners benefit. My recent research shows that this isn’t necessarily the case. In fact, municipal […]
A client recently ask whether and how much to contribute to her Roth 401k rather than her traditional 401k. Roth 401ks are relatively new on the retirement savings scene. If your employer offers one they allow you to contribute post-tax dollars. Amounts you withdraw after age 59.5 are not taxed. Roth 401ks are unlike traditional […]
Portfolios of Fidelity and Vanguard stock index funds topped the 2015 performance of portfolios of actively managed funds recommended by Kiplingers, Money, and Forbes. The Fidelity portfolio’s 2015 real return topped Kiplinger’s by 0.66%, Money’s by 1.85%, and Forbes’ by 2.29%. This analysis shows that even the experts often miss picking stock funds to beat the market. […]
When do you rebalance your retirement accounts? You have chosen and implemented an asset allocation (the percentage of stocks and bonds in your portfolio) that matches your desired risk and reward level. But you just received your year-end retirement account statement. The weighting of each asset class in your portfolio has changed! What happened? Over […]
I often advise clients on how to set financial goals. One technique I use is to ask “how much by when?” Answering this question is a good way to put meat on the bones. It makes your financial goal concrete. The technique also provides an easy way to check whether you achieved your goal. One […]
