Our 2020 Finances: How Did Our Portfolio Do?
(Click here for Part 1 to see how much we spent this year.) Alright! 2020 is finally over! We made it! Just barely, but we made it! At the beginning of this year, we were hanging out in Chiang Mai, Thailand. We were riding high off the surprisingly strong stock market performance of 2019 that saw our 60/40 portfolio return a stunning 16%. And I was sitting in a cafe answering emails from readers asking how I could justify putting money into the stock market when valuations were at such nosebleed levels? My answer to them turned out to be […]
Joe Biden Wants to Change 401(k) Plans
A little over two weeks ago, Joe Biden was projected by every major media outlet to become the 46th president of the United States. Predictably, the current occupant of the White House and his supporters took it super well, taking to the airwaves to claim he won the election and challenging the results in court, alleging massive voter fraud. All of that sound and fury, however, has so far resulted in nothing. Over thirty lawsuits filed by the Trump administration have been thrown out because they have not shown any evidence of voter fraud affecting enough votes to sway the […]
What is a K Shaped Recovery?
As a planet, we have been going through quite the shit year, to say the least. What started off as a strange-sounding disease being reported out of Asia has spun into a worldwide pandemic, a stock market plunge, and a worldwide recession. Through it all, economists and politicians (and one in particular) have been predicting an economic recovery, but the nature and “shape” of that recovery has been up for endless debate. Will it be a miraculous rapid V shaped recovery, as the President keeps crowing? Will it be a protacted U shape? Or maybe the math-nerdy Reverse Radical shape, […]
Why is the Stock Market Up While Employment Is Down?
This has been a weird year to say the least. Back in January, if anyone mentioned Wuhan, most people would have said “Where’s that?” I miss thse days. It was a simpler time. Now we’ve been hit with a global pandemic, a sputtering economy, closed borders, and rampant unemployment. By any commonly accepted metric, whether it’s GDP, unemployment, or whatever, the economy is still nowhere close to normal. And yet stock markets are actually higher than where we started the year. How can this be possible? How can Wall Street be looking so rosy and optimistic when Main Street is […]
How Does the Zero-Interest Rate Environment Affect You?
The other day a reader emailed me to ask “I’ve read your advice in the Investment Workshop about owning a mix of stocks and bonds, but that was back when bonds actually paid something. With interest rates in the gutter, does that advice still hold?” Great question. Let’s dig into this a bit, shall we? During the last economic downturn in 2008, one of the key decisions that helped save the economy (or rather, prevented it from falling off a cliff even more) was that central banks around the world chose to drop their key lending rate to near-zero. This […]