Common Investor Mistakes – Pt. 1: Emotional Trading
Are you making avoidable mistakes in your portfolio because of some behavior bias? If you answered no to this question, you might be suffering from having an overconfidence bias which will ultimately lead to making mistakes. Much of today’s academia concentrates on traditional finance. Traditional finance ignores how individuals actually behave and instead focuses on […]
Closer to College – Key 529 Plan Facts
You have saved for many years into your child’s 529 plan and now you and your child are on the verge of college tours and applications to decide where your child will spend the next 4 years of their life. Now is a good time to familiarize yourself with some of the nuisances of 529 […]
Hiring a Financial Advisor – The “When, Why, and Who”
WHEN should you start looking for an advisor? For many, hiring an advisor should be considered during the accumulation phase of their life. Unfortunately, many people assume they only need an advisor when they have accumulated a certain amount of wealth, are nearing retirement, or both. In reality, this assumption could not be further from […]
Asset Location: 3 Steps for Success
Asset location is an important aspect of portfolio composition and one that often gets overlooked. Like many concepts in finance, it can be part art and part science. What is asset location? It is the concept of how to utilize different savings vehicles and where to place investments among those vehicles to minimize income tax. Here we will talk about 3 steps to follow for success. 1. Establish 3 Buckets to Provide a Foundation In order to utilize asset location […]
How Much Cash Should I Hold?
Most people hold cash in some combination of checking and savings accounts at a bank. The cash in these accounts is used to pay for normal everyday expenses throughout a typical month. However, in addition to holding cash in a checking/savings account to pay for bills, you should also consider having a separate savings account designated as an emergency fund. This emergency fund won’t fluctuate monthly like your checking and savings accounts and the purpose of holding it is to be a buffer against an unforeseen event. Having an emergency […]
Password Management – Best Practices
It seems like everywhere you turn online these days, you are being asked to create an account and subsequent password. Want to buy textbooks for your college student or reference your doctor’s advice from your last visit? Well, set up an account and create a password! Passwords are now needed for everything from retail websites, social media, and e–mail accounts to medical providers and financial institutions. According to the latest research by NordPass, the average person has 100 passwords to remember! Obviously, some of these passwords […]
Dollar-Cost Averaging – What Is It?
Dollar cost averaging has many different names which include constant dollar plan, unit cost averaging, incremental trading, and cost average effect. But they all speak to the same strategy. Simply put, dollar-cost averaging is dividing up the total amount invested across periodic purchases. The act of dollar-cost averaging was first popularized by Benjamin Graham in his classic investing book, The […]
What Is The Best 529 Savings Plan For You?
When saving for educational expenses, one of the key decisions you must make is what savings and investment vehicle is best. We have previously written a blog “How Should I Save For College?,” which talks about which vehicle might be best for you. In many cases a 529 savings plan is the best option, but […]
What Does It Mean To Have A Diversified Portfolio?
There are many misconceptions about diversification and what it means to have a diversified portfolio. One of the questions I get a lot is: “I own XYZ stock. Is it a good time to sell it?”. Usually, my immediate follow up, even before looking into the stock, is how big of a position is the stock in your portfolio […]
When You Should Contribute to a Retirement Plan
Often the mantra you hear when it comes to contributing to retirement plans such as 401(k) or 403(b) plans is to “max out your plan”. And, if you have the annual income necessary to meet these thresholds, you should absolutely take that approach. But there are many people who cannot “max out” their plan and […]