communication-cartoonTalking about money can be a difficult subject and even more so, with your partner. It can be a major hurdle to overcome without an easy flow of communication. In his latest column, Bill outlines the steps to achieve good financial health. He acknowledges that you and your partner may have grown up approaching money issues differently, which can create their own challenges. However, forming an emotional space where both of you can talk freely is the first step to success. The big challenge is to move forward with this understanding, recognizing that although there will be differences, you still can create financial harmony.”

Pie recipe2

“Investors who spend time selling stocks and mutual funds that go up in price are missing out on the largest part of the money pie because they don’t give their investments a chance to sit there and do what they are supposed to do – compound. If you own stocks or mutual funds and reinvest the dividends, your money is put to work in the biggest piece of pie, and the time you save by not obsessing over buy-low and sell-high strategies can be used to pursue those things in your life you really have fun at … like baking pies.”  –The Coffeehouse Investor, pg. 79

We are huge fans of compounding here at the Coffeehouse, it is the gift that keeps on giving. Every year around Thanksgiving, we dedicate time to share the best part of the money pie and the advantages investing for the long haul can bring. We also really appreciate a good pie, we have published the pumpkin pie recipe from The Coffeehouse Investor book for your enjoyment.

From our Coffeehouse family to yours, Happy Thanksgiving!

presidential_elections_1844You can almost feel the positive and negative energy build as election night turns the corner. The media noise is reaching unbearable levels and the projections can make the sanest investor turn irrational. Regardless of what camp you sit in, it is important to keep your long-term financial plan in clear view in the days ahead. Vanguard provides a very simple explanation of typical market performance post-election in this short three minute video. Their practical advice is exactly what we need in this turbulent climate of our democratic process.


Our own history may be to blame for our lofty expectations for stock market returns. Regardless of who lives in the White House in the months to come, slower economic growth is likely here to stay, according to this history lesson by the Wall Street Journal.

This article was published in our latest newsletter. To read more from the Coffeehouse Investor, sign up for our monthly publication.


“From a financial planning perspective, the goal isn’t to try to avoid bear markets; it is to choose an allocation between stocks and bonds in such a way that you never have to sell your stocks in a bear market to pay your monthly bills.”

With various world events unfolding, stockholders often wonder how and where to invest in light of these unknowns. However, when investors build portfolios diversified in index and passively managed funds, the “how” and “where” questions often become unsubstantiated. In my latest column, I discuss the advantages of diversification and its performance in light of economic events. I encourage all investors to participate in life’s events, not only with careers, but also with financial practices.




As the index fund turns 40 years old this week, the same question remains, “Will the growth of index funds and passive investment management become too large?”

We get this question a lot from folks who worry about the growing success of index funds. The Wall Street Journal discusses the complex thought and some concerns surrounding the passive investment movement. Index fund pioneer John Bogle, doesn’t rule out the idea that passive investing could become too large. However, he explains that the rise of index funds would require much greater growth than already seen by economists. The market would need to see at least 90% of investments in index funds. Jason Zweig explains the reasoning for an active investing presence and shares data on why active management is unlikely to vanish anytime soon. Happy Birthday Index Fund!


“Financial decisions we make in our everyday lives are much more important than trying to pick a few top-performing stocks and mutual funds.”

Recently, I discuss the notion that checkbook management is more related to investment management than what Wall Street would like us thinking. Monte Carlo simulations, standard deviations, and Smart Beta Funds seem to only chase investors away or lure them into misguided advice from unreliable sources.

The Coffeehouse Investor approach allows investors to decrease the investment discussions with financial advisors and rather, focus on the more important financial planning matters that really create successful long-term financial plans. If you’re not spending your time answering the hard questions I discuss in my column, I suggest you turn your attention away from the things you can’t control, and back to the things you can control in your everyday life.

Capture“What sane person would attempt to rewire his house or take out her own appendix?”

That is a ridiculous question, right? Unfortunately, we have millions of uninformed workers managing their own 401K accounts and attempting to time the market with dismal success. The Wall Street Journal discusses the issues developed with the downfall of pensions and what we, as the working population should be doing to set ourselves up for retirement success. If every employee would sit down with a financial professional and devise a long term financial plan, the retiree nest egg landscape would paint a very different picture.

bullWe get a lot of questions about owning stocks in a down market and the uncertainty that exists. I address this in my latest column and share my reasons for the consideration of common stocks despite economic volatility. I use the word “bullish” in my reasons because I base my findings on hard numbers.It is an acceptance that over the long haul the appreciation in common stocks has closely tracked the collective growth of underlying companies that make up the stock market.” I make a point to explain that today’s economic climate is entirely different then when I was working on Wall Street 33 years ago. As investors in today’s market, we must embrace the belief that a significant allocation to common stocks is necessary to generate any type of meaningful long-term returns.

IMG_0884Picking a winning fund is about as easy as picking the winning men’s NCAA team and even then, it may come down to a lot of luck and one excellent buzzer-beater three-point shot. Dan Solin discusses the problem with hiring and firing fund managers based upon passed performance and how the methodology doesn’t work when examining the data. His advice is similar to what you would find in our playbook, Abandon the elusive goal of trying to “beat the market” by selecting outperforming actively managed funds. Limit your investments to a globally diversified portfolio of low-cost, passively managed funds that capture global market returns. Focus on your asset allocation (the division of your portfolio between stocks and bonds) and deferring or avoiding taxes.” Dan also cautions those with 401K plans and managers operating within this methodology, it might be time to start paying closer attention to the retirement process.