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Investing Blog Roundup: Investors Do Better with All-In-One Funds

Morningstar recently released the annual update to their “Mind the Gap” study, which looks at how well investors do with various categories of mutual funds. That is, it specifically looks at how investors do as compared to the investments — looking to see whether investors make good or bad decisions with the timing of their purchases and sales.

You can find the writeup here. (You’ll need a free Morningstar account to read the article.)

As they have found repeatedly, investors do best with “allocation funds” (i.e., funds that hold a mix of stocks and bonds — balanced funds, target-date funds, etc). Because such funds are not as volatile, people have an easy time simply buying them and holding on to them.

I’ve been saying this for years based on my own experience, and I hear the same thing over and over again from readers.

Other Recommended Reading

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Investing Blog Roundup: CFP Directory Not Disclosing Disciplinary Information

There’s been something of a hullabaloo in the last two weeks as a result of a WSJ article about the LetsMakeAPlan website (a directory of financial planners, run by the CFP Board). The WSJ found that the website often does not disclose information about a CFP’s history of discipline by regulatory bodies or history of bankruptcy, even though they have access to such information.

Here’s what the WSJ found:

“The LetsMakeAPlan.org site has been presenting more than 6,300 planners without showing such problems even though the planners have disclosed them to the Financial Industry Regulatory Authority, according to a Wall Street Journal analysis of more than 72,000 profiles on the website.”

Retirement Income Style Awareness Survey

As a separate point of note, retirement researcher Wade Pfau wrote this week about a survey/questionnaire that his firm is working on.

The idea is that it will help people to determine the best personal approach for them to take for retirement income planning.

At this stage they are looking to have about 1,000 people in total take the survey to help determine which questions provide the best explanatory power for helping to define a style in order to make the final version of the survey.

If you’d like to participate, you can find the survey here.

Pfau told me that participants will be able to get results in the Fall once all of the analytics have been worked out. (This is why the survey asks you to create an account — so that you can get your results once everything on the backend has been completed.)

Other Recommended Reading

Thanks for reading!

Investing Blog Roundup: Preparing for the Possibility of Cognitive Decline

One concern I know many readers here share is the possibility of diminished cognitive ability as they age. Many of you who are already retired have mentioned to me that you have opted to simplify your portfolios (in some cases switching to an all-in-one fund). And some of you have mentioned such concerns as one of the reasons you chose to delay Social Security and/or purchase an annuity.

This week we have an article from CPA/CFP Jeffrey Levine, walking you through the basic options for different types of accounts/documents that can allow your family members to help manage your finances, in the event that you do end up needing such help.

Other Recommended Reading

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Investing Blog Roundup: Taxes Made Simple, 2019

The 2019 editions of Taxes Made Simple and my book about taxes for sole proprietors are both now available. In contrast to the major changes that were necessary from 2017 to 2018 (due to the new tax law), the changes from 2018 to 2019 were relatively modest — inflation adjustments to various figures, minor improvements to wording here and there, etc.

Recommended Reading

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Investing Blog Roundup: “More Art than Science”

I’ve published ten books (not counting follow-up editions of various titles). Nine are still in publication.

Of those nine books, one of them generates 45% of the total revenue — almost as much as the other eight books combined. Prior to publishing the book in question, I would never have guessed that it would be so much more successful than the other books. And I’d bet that if you were to guess which book it is, you’d have a roughly 8/9 chance of getting it wrong.

One might say that publishing books is “more art than science.”

This week, Michael Batnick takes a look at the “more art than science” concept.

Other Recommended Reading

Thanks for reading!

Investing Blog Roundup: David Swensen vs. Target-Date Funds

Target-date funds are often characterized as the sort of thing that’s only suitable for beginner investors — knowledgable investors can surely do better.

As long-time readers know by now, I don’t agree at all. I think a simple all-in-one fund makes a great portfolio in quite a lot of cases, even for people with plenty of experience/knowledge.

And as Ben Carlson notes this week, even very knowledgable investors — famous ones, even — don’t necessarily do any better.

Other Recommended Reading

Thanks for reading!

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