Sound Advice

What are the advantages and disadvantages of robo advisers?   Advantages of Robo-Advisers Lower Fees : Robo-advisers typically charge much less than traditional human advisers, with management fees often ranging from 0.25% to 0.50% per year, compared to 1% or more for traditional advisers. Low Minimums & Easy Onboarding : Many robo-advisers offer low or no account minimums, making them accessible to beginners and those with modest investment amounts. The sign-up process is usually straightforward and fully online. Automated, Hands-Off Management : Portfolios are automatically rebalanced, and asset allocations are adjusted based on your goals and risk tolerance. This "set-and-forget" aspect is ideal for investors who want minimal involvement. Evidence-Based Algorithms : Many use investment models inspired by accepted financial theories, aiming to maximize returns for a given level of risk. Tax-Loss Harvesting : ...

What's the worst time of year for the stock market? Historical Patterns The  worst time of year for the stock market  has historically been the month of  September .  This trend, known as the "September Effect," is supported by data showing that major stock indices such as the S&P 500 and Dow Jones Industrial Average often record negative returns in this month.  Since 1950, the S&P 500’s average return in September is around -0.5%, making it the only month with consistent losses over such an extended period.  On a weekly basis, September also ranks low, with week 38 (typically in late September) posting the worst average return since 1926. Why September? Several factors may explain September’s poor performance: Portfolio Rebalancing : Institutional investors often rebalance portfolios at the end of the third quarter, sometimes leading to stock selloffs. Tax-Loss Harvesting : Some investors begin selling losing positions ...

Market returns vary considerably over presidential terms   Market Returns Across U.S. Presidential Terms Stock market returns show significant variation across different presidential terms.  Although the president’s policies may influence short-term market direction and sector performance, a wide range of factors—especially economic trends, monetary policy, and global events—drive overall market outcomes.  Nevertheless, notable patterns and differences have emerged in market performance during and around presidential terms. Average Stock Market Returns by Presidential Term President Years in Office Avg. Annual S&P 500 Return Barack Obama 2009–2017 12.8% Donald Trump (1st term) 2017–2021 13.6% Joe Biden 2021–2025 11.9% Donald Trump (2nd term)* 2025–present 4.6% (early tenure) ...

Why you should ignore commercials about investing   Ignoring commercials about investing is often a wise move, and here’s why: 1. They’re Sales Pitches, Not Financial Advice Commercials are designed to sell — not educate.  Whether it's a brokerage, crypto app or a “miracle” stock-picking service, their primary goal is to get your money, not help you build long-term wealth.  They're advertising, not advising. 2. They Oversimplify Complex Decisions Investing is deeply personal and depends on your goals, risk tolerance, time horizon, and financial situation.  A 30-second ad can’t possibly account for that.  They make it seem easy, but real investing requires thoughtful planning and understanding. 3. They Prey on Emotion Commercials often use fear of missing out (FOMO), urgency (“limited time offer”), or dreams of quick riches.  This emotional manipulation pushes impulsive decisions — which is the opposite of sound investing. 4. They Often Push ...

Why investing in inexpensive market index funds is a great idea Investing in inexpensive market index funds is widely regarded as a smart and effective strategy for most investors.  Here’s why: 1. Broad Diversification Market index funds track a wide variety of companies across different sectors. For example, an S&P 500 index fund gives you exposure to 500 of the largest U.S. companies. This diversification lowers the risk compared to picking individual stocks, as poor performance in one company or sector can be offset by better performance in others. 2. Low Fees = Higher Returns Inexpensive index funds have very low expense ratios (often 0.03%–0.10%), meaning you keep more of your investment gains.  Actively managed funds often charge 1% or more, which can significantly erode returns over time due to compounding costs. 3. Consistent, Market-Matching Performance Index funds don’t try to beat the market—they match it. Since most active fund managers fail to c...

An Important Market Signal is Flashing RED Robert Shiller is a prominent American economist, academic, and author, best known for his work on financial markets, behavioral economics, and housing markets.  He is Sterling Professor of Economics at Yale University.  In 2013, he was awarded (along with Eugene Fama and Lars Peter Hansen) the Nobel Memorial Pri ze in Economic Sciences for empirical analysis of asset prices. Robert Shiller’s CAPE index is a valuation measure for the stock market that compares current stock prices to average inflation-adjusted earnings over the past 10 years.   It’s designed to smooth out short-term earnings fluctuations and better reflect long-term value.     In 1999-2000, the CAPE index soared to over 44, for above its long term average. The Shiller CAPE (Cyclically Adjusted Price-to-Earnings) index is currently at historically elevated levels—recent readings hover between 36.8 and 38.6, compared to a long-term median value of...