How TIPS Provide a Guaranteed Real Return

Do TIPS really keep up with real inflation? The most important thing to remember is that TIPS provide a guaranteed real return. While this might be a bit complex, here are two ways TIPS can provide you with a guaranteed real return, which I will outline below. In addition, I have included relevant information about … Read more

The Real Difference Between Roth and Traditional IRAs

There is a limit which is set by the IRS every year for both Roth and Traditional IRA accounts. The current IRA contribution limits for those under 50 is $5,000 and for those over 50 it is $6,000. This allows for what is called a catch up. What is important in making the decision between … Read more

Should You Pay Off Your Debt Before Investing?

Is it best to get out of debt before you start investing? This is a common question that comes up quite often. The issue is actually fairly complex considering the many different types of debt and investment options available. In general, the answer is you should pay off your debt before investing. Here are some … Read more

Correlation of Returns: The Reason Why Diversification Didn’t Work

Correlation of Returns: The Reason Why Diversification Didn't Work 5

None of the alternative investments provided sufficient risk reduction to soften the impact of the Bear Market. Alternatives such as Commodities, Equity REITS, International Equities doesn’t seem to be working. The U.S. Treasuries were one of the few asset classes that really provided sufficient diversification. What went wrong? First let’s address the question of “Diversification … Read more

Should You Own Individual Stocks?

One of my rules of prudent investing is that no one should own individual stocks. That has far more to do with speculating than investing. Instead own only mutual funds (or ETFs) that own all the stocks within a particular asset class (e.g., small caps, value stocks, emerging market stocks, etc.). Then build a globally … Read more

Warren Buffett versus Modern Portfolio Theory

In this Ask The Expert With Larry Swedroe article, Zapp challenges the legitimacy of Modern Portfolio Theory citing Warren Buffett as a rule breaker.  So which is it, Modern Portfolio Theory or Warren Buffett? Here’s the question from Zapp: Other than by taking the self-denigrating stance: “I am not an above average investor”, how can … Read more

Low Cost Diversification With Vanguard Total World Stock ETF (VT)?

In this Ask The Expert With Larry Swedroe article, the reader, Murali, is wondering if she could use the Vanguard Total World Stock ETF (VT) to simplify and diversify her investment portfolio.  Vanguard is known for its high quality and low cost investment products, and the Total World Stock ETF should provide most of the … Read more

What is the Best Portfolio Rebalancing Strategy?

In this Ask The Expert With Larry Swedroe article, the reader (Edward) is wondering what’s the best way to rebalance his investment portfolio and increase his fixed asset allocation.  Due to the stock market crash, he is reluctant to sell his beaten-down stocks to increase his bonds allocation.  Is it better just to allocate new … Read more

Lost Money In The Stock Market, What Should I Do?

In this Ask The Expert With Larry Swedroe article, the reader (Larry) lost a lot of money in the stock market.  He detailed his plight and complained about his full service brokerage firm.  It’s 2009 and he only have half of what he did a few months ago.  What should he do?  Here’s the question … Read more