Every so often, when I sit down at my computer and open up my e-mail, I find a letter from a Coffeehouse Investor sitting in my inbox. Their comments and “thank-you’s” for the efforts I put forth in creating the Coffeehouse Investor 14 years ago spur me on to do more with our three simple principles.
And while these e mails are sent from investors of all types and all ages, it is especially gratifying to know that so many female investors tune in to The Coffeehouse Investor.
On this day when we celebrate Mother’s Day, it is particularly important to give Moms the knowledge, resources, and confidence to be smart investors of their financial resources.
Doing good work as a Mom is a full-time job several times over. I look at the effort my Mom put in to raising eight children on that farm in Southeastern Washington state, and I have no idea how she managed to do it, day after day, and keep her sanity. But she was there for us, and still is, day after day. Her presence continues to be a vibrant force in the lives of her children and grandchildren as we get on with living our own lives.
(For instance, just yesterday I received a note in the mail from her with some stretching exercises for golfers – how sweet is that?)
Why is The Coffeehouse Investor especially meaningful for women? It allows the female investor to invest with confidence without getting caught up in the “male-dominated” energy of Wall Street. It is no secret that this energy can be condescending at times, an attitude of “I know better than you do, so follow my advice.”
When you become a Coffeehouse Investor, you aren’t following anyone’s advice except your own – including your own confidence in people and economies and countries around the world, and that the creativity and productivity of these people will be reflected in the long term growth of the stock market.
Not surprisingly, I have found, in working with countless investors including many Moms, that this confidence in one’s own ability to build successful portfolios spurs them on to not only take control of their household savings, but the impetus to save more.
Thanks to all the great Moms out there. Keep up the great work.
I am loving this time of year, and with the heat wave sweeping Seattle, new signs of life are springing up all over the place.
Today I want to talk about one component of life that is as important and essential as it is inevitable.
It is a bold and final statement to everyone’s life while alive.
It is our own dying.
I could write a couple of chapters (heck, we all could) about how death has touched and moved me, but for now I will just say that 21 years ago a close friend and director of a local Hospice Agency invited me to serve on the advisory board of Providence Hospice of Seattle.
That experience of serving people who are embracing the final act of life changed my life.
I started to deal with the fact that I wasn’t going to live forever, and that I better get on with my life, a catalyst that caused me to step away from my job as a stockbroker and eventually create The Coffeehouse Investor.
Last week a good friend of mine who has been intimately involved in nurturing hospice patients sent me a link to this article, written by a doctor, on the subject of dying – a healthy reflection on a topic many of us will be faced with sometime in our lives.
The sunshine has returned to Seattle, always a welcome sight after 5 months of grey and rain. I like this time of year because I am working in the yard, fixing up the house, and planting my garden.
Speaking of gardens, it takes a (very small) leap of faith to put the seeds in the ground with the hope that there will be enough sunshine over the next few months to harvest a crop sometime next August.
But beings I’m a farm kid at heart, I don’t give the sunshine a second thought. Even during the drought year of 1977, we still harvested enough wheat to buy seed for the next year, and a bumper crop at that.
I don’t know why I am sharing this with you, but maybe it has something to do with the anxiety so many investors are feeling these days with the current lofty levels of the stock market.
In my opinion, it takes a (very small) leap of faith to maintain a sufficient allocation in common stocks with the expectation that stock market levels are going to be significantly higher 10 years from now.
When looking at the possibility of a steep sell-off in the market over the next year, I am not saying it doesn’t matter, but, well, it doesn’t matter. I am counting on the next ten years, and, well, the sunshine has returned to Seattle.
I can’t remember the last time I purchased an individual stock. For me, owning the collective creativity of workers around the world makes a lot more sense for my serious money.
But I love following companies, especially startup companies, and the dynamics that make them succeed (and fail) in a competitive global environment.
There is one startup company called FutureAdvisor that I have been keeping a close eye on this past year. This company is an investment advisor web application that offers 401-k plan participants portfolio recommendations while focusing on the same principles found here at The Coffeehouse Investor – things like low fees, proper asset allocation, and of course capturing the return of broad markets around the world.
Amelia Greenhall, is FutureAdvisor’s Designer, Illustrator and Data Scientist. On top of that she climbs mountains, hangs on cliffs, and does other crazy things like summing up my two hour Coffeehouse webinars in a one-page illustration called The Awesome Portfolio Checklist.
I just love the creative energy of Amelia and the entire FutureAdvisor team who have found a way to help investors focus on what is important in reaching their financial goals.
If you are looking for some guidance on YOUR portfolio, check out FutureAdvisor. And while you are at it, download a copy of The Awesome Portfolio Checklist, paste it to your bedroom door, review it twice a year, and get on with your life!
“Bond funds still have a place, since they diversify the risks of stocks. But before you buy any active bond fund with fabulous performance over the past year, check how it has performed over the past five and 10 years. See how it did in 2008; the best test of whether a manager can avoid the next disaster is whether he avoided the last one.
Chances are, you will quickly see you are better off with an index fund or ETF that doesn’t pump up returns today with risks that will hurt you tomorrow.”
These are the words of Wall Street Journal columnist Jason Zweig, in his timely article on actively managed bonds (registration may be required).
In summary, while many actively managed bond funds have bested a comparable index over the recent past, it has been accomplished by extending the maturity in portfolios and increasing the risk (lower-rated bonds generally have higher yields).
This isn’t necessarily good or bad, but will certainly have the opposite effect on returns if and when rates increase.