Over the long term, corporate earnings tend to comprise about 10% of GDP.  This number fluctuates, of course, but the long-term trend is relatively consistent.  Since corporate earnings are eventually reflected in stock prices and their share of GDP is relatively stable, we can use economic growth forcasts to predict future stock returns.  The long-term [...]

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All investments have risk, even supposedly “risk-free” assets like US Treasury Bills.  For practical purposes, however, the yield on the 90-day US Treasury Bill is often referred to as the risk-free rate because the risk of these securities, while not quite zero, are extremely close.  According to Investopedia, the risk-free rate is
“…the minimum return an investor [...]

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Nobody knows the future and there are no crystal balls, but that doesn’t stop people from trying to divine the future of stock prices.  There have been many methods put forth over the years, most of them bunk.  That said, there are several workable frameworks that have shown themselves to be reasonably accurate over the [...]

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I’ve been told words like “most interesting” or “best” are divisive and politically incorrect.  From now on, instead of the most interesting posts of the week, I will giving out Weekend Link Love and sending good, happy vibes in your direction.  Everybody join me for a big group hug.
How Much Should You Save On A Hobby? [...]

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I often hear people ask “Which mutual fund company should I open my IRA with?” There are many choices, but I’m going to narrow it down to three. Some companies not on the list, like Schwab or American Funds are also respectable choices, but in my opinion these three are by far the best.

Fidelity Investments [...]

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Many people think life would be peachy if they were rich.  They wouldn’t have to work or worry about money or anything else, because there’s no problem their money couldn’t solve.  But is it really all that great?  I thought about it and I’m not sure being rich is all it’s cracked up to be.  [...]

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A little more than a year ago, I decided I needed a better cash rewards card than what I currently had, so I went out and signed up for a Chase Freedom Visa Card.  The card paid 3% cash back on gas, groceries, and fast food purchases (the terms have changed slightly since then).  Pretty [...]

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My post Mutual Fund Companies Often Make Better Investments Than The Funds They Manage was featured in this week’s Carnival of Personal Finance #145:  Baby Education Edition hosted by Million Dollar Journey.  Great job on the carnival to everybody involved.  Check out the Carnival of Personal Finance homepage for info on future carnivals.
I would like to [...]

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Much has already been written about Lifestyle Inflation, that notorious demon that rears its head every time you get a raise or a large bonus.  “What could it hurt to buy that new car?  It’s only an extra $200 per month but I just got a raise so I can afford it,” you tell yourself.  [...]

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Sure, everybody wants to buy the next Microsoft or find the next super-star fund manager that will allow them to cruise comfortably into retirement without saving another dime, but what do you think are the chances of that happening?  Probably no higher than winning the lottery or hitting the jackpot in Vegas.  Instead of wasting time an effort [...]

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