Sound Advice

Is there a good reason to work with an investment manager who uses separately managed accounts? Yes—but the fact that an investment manager uses separately managed accounts (SMAs) is not, by itself, a good reason to hire that manager. In many cases, an SMA is simply a more expensive way of implementing an investment strategy you could get through low-cost ETFs or mutual funds. What an SMA actually gives you: With an SMA, you own the individual securities directly rather than owning shares of a pooled fund. That can provide some legitimate advantages: Tax-loss harvesting: The manager can sell individual positions that have losses while maintaining similar market exposure. Tax customization: You can exclude particular stocks or industries or manage gains around your individual tax situation. More transparency: You can see exactly which stocks and bonds you own. Customization: The portfolio can be constructed around specific restrictions or ...

Is AI good news or bad news for investments? AI is potentially very good news for investors—but not automatically good news for every investment . The key distinction is between AI as an economic technology and AI stocks at today's prices . As of September 2026, there are compelling reasons for both optimism and caution: The bullish case: AI spending remains enormous. Gartner estimates global AI spending at $2.7 trillion in 2026 , up 49.5% year over year. If AI produces sustained productivity gains, corporate profits could expand well beyond the companies currently selling AI hardware. The valuation case: Investors have already priced in a lot of success. Valuations of major AI companies are elevated and expected long-term earnings growth is well above historical norms. The spending-risk case: The five largest hyperscalers are expected to spend more than $1 trillion on AI-related capital expendit...

What Exactly Is AI? A Plain English Guide for Everyone Who Has Been Afraid to Ask You Have Already Been Using It for Years You have heard the word artificial intelligence so many times in the past two years that it probably feels like you should already know what it means. But if you are honest with yourself, the definition is still a little fuzzy. Is it a robot? A computer that thinks? Something from a science fiction movie? Here is the truth: AI is none of those things. And you have almost certainly been using it for years without realizing it. Every time Netflix suggests a show you end up loving, that is AI. Every time your phone autocorrects a typo, that is AI. Every time Gmail filters a spam email before it reaches your inbox, that is AI. Every time Google Maps reroutes you around a traffic jam, that is AI. It has been quietly woven into daily life for well over a decade. The only thing that changed recently is that AI became something you can actually talk to. So What I...

Why buy variable annuities when you can buy mutual funds, which are similar investments with lower fees? If the underlying investments are essentially the same mutual funds, a variable annuity often adds a layer of cost and complexity without improving the investment itself. The key distinction is that a variable annuity is not primarily a better investment vehicle. It's an insurance contract wrapped around investments. Why choose the variable annuity? There are a few legitimate reasons: Tax deferral Gains inside the annuity aren't taxed each year. But this benefit is much less compelling if you're already using a tax-advantaged retirement account such as an IRA or 401(k). Death benefit Some contracts provide a guaranteed minimum death benefit. This can be valuable in particular circumstances, although you're paying for it. Guaranteed-income riders Some variable annuities offer living-benefit riders that can provide ...

Fixed annuities are usually among the worst investments. Fixed annuities are not inherently bad, but they are often poor investments when compared with low-cost alternatives, especially for someone who already has adequate retirement income and doesn't need an insurance guarantee. Here are the main reasons: 1. Low expected returns A fixed annuity typically provides a guaranteed interest rate, but that rate may be substantially below what you could reasonably expect from a diversified portfolio of stocks and bonds over a long retirement. The trade-off is intentional: You surrender some upside in exchange for guarantees. 2. Inflation can quietly eat away at your money Suppose an annuity earns 4% while inflation averages 3%. Your nominal balance is growing, but your purchasing power is increasing by only about 1% before taxes. For a retirement that could last 25–30 years, inflation risk matters enormously. 3. Your money can be difficult to access Fixed annuities co...

Am I better off with a local cost total market index fund or a costly wealth manager? For many investors, a low-cost total market index fund is the better choice . A costly wealth manager can be worthwhile, but only if they provide value beyond investment selection—things like tax planning, estate planning coordination, retirement-income strategy, behavioral coaching, and complex financial decision-making. The key question is not "Can a wealth manager pick better stocks?" Most cannot consistently beat a low-cost index approach after fees. The question is: "Will the advice and discipline they provide be worth the fee?" The cost difference is enormous Suppose you invest $1 million for 20 years and earn a hypothetical 7% annual return before fees: Approach Annual cost Approx. ending value Total market index fund 0.05% ~$3.84 million Wealth manager 1.00% ...