Archives for September 2026

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Financial Planning Roundup: Strengths and Weaknesses of Advisor Fee-Only Models

For anybody considering hiring an advisor, it’s important to know exactly what you want. That is, it’s best if you go shopping for an advisor who meets requirements that you have selected, rather than letting somebody come to you to sell you their services.

One way in which advisors can be categorized is by what services they provide. At a very high level, the options would be:

  1. Advice-only (i.e., they provide advice but do not manage the portfolio),
  2. Portfolio management with very limited advice, or
  3. Comprehensive financial planning, together with portfolio management.

Financial planners/advisors can also be grouped by designation (CFP, CPA, PFS, CFA, EA, etc.) or by areas of expertise.

Finally, it’s important to have a good idea of what fee model(s) you’d be willing to accept. Allan Roth recently wrote a piece discussing the pros and cons (from the client perspective) of the various fee-only (i.e., non-commission) models:

Other Recommended Reading

Thanks for reading!

September 28, 2026

Ways that Owning Individual Stocks Can Go Wrong

Most of the time, when people buy individual stocks (or choose not to sell ones that they already own), the thought process appears to be something along the lines of: I expect that this company will earn lots of profits in the coming years.

But that’s not a good enough reason to buy an individual stock. (Nor is it a good enough reason to choose not to sell a stock that you already own.)

Choosing to allocate anything more than a trivial portion of your portfolio to an individual stock means taking on considerable additional risk, relative to simply owning a diversified fund of stocks. So you need to have a strong reason to think that this particular stock will earn better returns than the overall market.

And, what most people don’t know is that the performance of a given stock is not determined by whether the underlying company performs well or poorly. Rather, it is determined by whether the underlying company does better or worse than the market expected it to do. There is, therefore, little to be gained from picking individual stocks unless you have some unique insight about the company which the broader overall market does not have — something that isn’t already “priced in.”

A quick litmus test: have you even attempted a financial analysis of the company? Have you looked at their financial statements? Have you done any financial modeling at all? If not, you owe it to yourself to be honest about what you’re doing. You’re investing based on vibes. And you’re pitting that approach, and your money, against professionals who are taking a considerably more rigorous approach to the process.

Another hurdle: if you do think you have a unique insight into this company’s future profitability, it’s important to make sure that you won’t be running afoul of insider trading rules if you make any trades based on the information you have.

But even from that point (i.e., you firmly believe you have a unique insight into the company’s future profitability, and you’re confident that it’s not based on insider information), there are still multiple ways that it can go wrong.

The unique insight you have about the company could turn out to be wrong. A common version of this is, “right line of business, wrong company.” You successfully identified a line of business that grew much faster than the market expected, but the specific company you chose turned out not to be the winner in that industry.

Alternatively, the unique insight you have about the company could turn out to be right, but you were wrong about it being unique. In other words, the market already knew, and the information was already baked into the price.

Another possibility: the unique insight you have about the company turns out to be right, but you weren’t accounting for some negative factor that the market was accounting for (and you were thus overvaluing the stock).

And finally: the unique insight you have about the company turns out to be right, but neither you nor the market was accounting for a negative factor that turned out to be important (i.e., everybody was overvaluing the stock).

September 21, 2026

Financial Planning Roundup: 153 Million Drivers License Scans Made Illegally Available for Sale

Earlier this month, news broke that somebody was selling scans of more than 153 million drivers licenses. It appears that it’s the result of a breach at a company (IDscan.net) that provides ID scanning services for other businesses, such as Hertz car rental, Target, and FedEx.

This is up there with the 2017 Equifax breach in terms of total number of people affected (i.e., almost half the U.S. population). It’s depressing/infuriating that we have so little control of where our information ends up. And this event definitely reinforces the lesson that any account secured exclusively with “private” information is no longer sufficiently secured, as the bad guys increasingly have access to our private information.

Other Recommended Reading

Thanks for reading!

September 14, 2026

A TIPS Ladder in a Single ETF? (Northern Trust Inflation-Linked Distributing Ladder ETFs)

A reader writes in, asking:

“Have you encountered the ‘Inflation-Linked Distributing Ladder’ ETFs from Northern Trust? It looks to me that they create an entire TIPS ladder for you, and all you have to do is just buy a single fund. Too good to be true?”

Yes, the ETFs in question do create an entire TIPS ladder for you. But there is a catch. We’ll get to that in a moment.

Firstly, I want to note that these are very different from iShares’ target-maturity TIPS ETFs. The ETFs from iShares each buy TIPS maturing in a single year (i.e., each of the ETFs could serve as a single rung in a ladder, rather than being a ladder on its own).

In contrast, the Inflation-Linked Distributing Ladder ETFs from Northern Trust each own an entire TIPS ladder (with the final year being the year in the fund’s name). Here are the options so far:

  • Northern Trust 2030 Inflation-Linked Distributing Ladder ETF (TIPA)
  • Northern Trust 2031 Inflation-Linked Distributing Ladder ETF (TIPE)
  • Northern Trust 2035 Inflation-Linked Distributing Ladder ETF (TIPB)
  • Northern Trust 2036 Inflation-Linked Distributing Ladder ETF (TIPF)
  • Northern Trust 2045 Inflation-Linked Distributing Ladder ETF (TIPC)
  • Northern Trust 2046 Inflation-Linked Distributing Ladder ETF (TIPG)
  • Northern Trust 2055 Inflation-Linked Distributing Ladder ETF (TIPD)
  • Northern Trust 2056 Inflation-Linked Distributing Ladder ETF (TIPH)

They started with the 2030, 2035, 2045, and 2055 funds last year, and added the other funds this year. It seems likely that next year they’ll launch another four funds (i.e., 2032, 2037, 2047, 2057).

The idea is that, for each fund, as the bonds mature or make interest payments, the fund distributes cash. And when the final bonds mature, the fund distributes its remaining assets and then closes. So, yes, each of these ETFs really is an entire TIPS ladder via a single fund.

And they’re low-cost as well, with expense ratios of just 0.10%.

The catch: the distribution policy makes no sense (at least in my opinion). The funds distribute cash when bonds pay interest or mature, which makes sense. But they also distribute the inflation adjustments as they occur. What that means is that, in order for your holding to actually go up along with inflation (which is generally the idea of a TIPS ladder), you’d have to manually reinvest the distributions that are the result of inflation adjustments. And you can’t just set it to automatically reinvest all distributions, otherwise you’d be reinvesting the other distributions as well.

So these ETFs are much less work to set up than a DIY ladder of individual TIPS, but they involve ongoing management work, whereas a ladder of individual TIPS is generally just left alone once it has been put it place.

They’re so close to being a major convenience upgrade. But as it stands, they’re just trading work now for work later. For some people that might still be a desirable tradeoff. For me, it puts them in the “neat idea, but no thank you” category.

One other point: so far, the funds are tiny, in terms of assets managed. I hope they catch on. But I hope even more that somebody eventually creates a product that really is a set-it-and-forget-it TIPS ladder all in a single fund.

September 7, 2026
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