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Showing posts from October, 2021

Sound Advice: October 13, 2021

The U.S. Stock Market Has Been Doing Better Than Most Stocks   That’s a confusing concept, but it is reality.   Over the latest five years, as measured by the Standard & Poor’s 500 Index, the stock market has gained 106%.   The S&P 500 Index is generally considered to be a good representation of the U.S. stock market as a whole, but it most certainly is not.   Why?   Because five companies (Apple, Amazon, Microsoft, Facebook, and Google) combine to make up nearly a quarter of the index.   As these five go, so goes the index.   If this index is viewed with all companies measured on an equal basis, the net result for the period drops to 87%. The comparison is even more striking when we divide the S&P universe into large cap, midcap, and small cap companies.   (Cap is short for market capitalization, which is the total value of all shares of a company.)   Over the latest five years, the gain in large caps was 171% compared to 84% for midcaps and 77% for small caps. Thi

Sound Advice: October 6, 2021

Investing in Education? Here’s How Although it’s tempting to think the purchase of a home for your family is the biggest investment you’ll ever make.  In most cases, it’s not.    The Number One investment will be your children’s education.  For a baby born today, four-year tuition at a private college will be more than $500,000.  Multiply that by the number of kids in your family and it will dwarf whatever most homes cost.   The good news is that in many cases financial assistance will be available, especially if the students have good academic records.  In addition, student loans can help fill in the shortfalls. Even so, the parents or grandparents will still have to bear a substantial part of the cost.  That’s where 529 plans come in. A 529 plan is a tax-advantaged plan to encourage savings for future education costs.  There are two types: prepaid tuition plans and education savings plans.  Every state has at least one type of 529. Education savings plans are the most commo