Sound Advice

How is the similarity between Germany in 1933 and the current turbulence in U.S. politics likely to affect the financial markets? The parallels between Germany in 1933 and current U.S. political turbulence may amplify financial market volatility, but there may be important distinctions.   In 1933, Germany's political upheaval and rise of authoritarian leadership fostered extreme market reactions—companies with political connections to the new regime outperformed the rest of the market, while general uncertainty and crisis sharply affected investor sentiment and economic stability.   In the current United States, political divisions, government shutdowns, and leadership controversies have triggered immediate market downturns, increased risk aversion, and surges in safe-haven assets like gold.   Even so, the scale and nature differ:   America retains robust institutional checks, and financial markets tend to rebound after periods of political tension. Those rebounds,...

Is a total market index fund a better choice than a broad portfolio of stocks?   A total market index fund is generally considered a  better choice for most investors  compared to attempting to assemble a broad portfolio of individual stocks, primarily due to superior diversification, lower costs, and simplicity. Total market index funds provide exposure to essentially all publicly traded stocks in a market (such as the entire U.S. stock market), including large-cap, mid-cap, and small-cap companies, thus reducing company-specific risk and the need for individual stock-picking skills. Key benefits of total market index funds: Diversification:  One fund can offer broad market exposure across thousands of companies and all major economic sectors, lowering the impact of poor performance from any single stock or sector. Low Cost:  These funds typically have very low management fees (expense ratios), which helps investors keep more ...