RESOURCES

Stock market valuations have clearly been rising since early 1982. In fact, investors now pay over five times as much as in 1982 for a dollar of cyclically adjusted earnings, and 11% more than in 1929, when economist Irving Fisher declared, “stock prices have reached ‘what looks like a permanently high plateau.’” Indeed. Nearly a century later, have we finally entered a “permanently high plateau”? Are fat pills and algorithms able to do what online commerce and cat videos couldn’t? Readers must make up their own minds. The data hasn’t supported this yet, but investing is all about looking forward. As you do, I hope you look forward to my next article on what current valuations mean for future returns.

I’ve coined the term Investing 3.0 for an approach to investing that is newer than the other two, and which I believe solves the problems inherent in both Investing 1.0 and Investing 2.0. Investing 3.0 is quantitative investing. It is also called rules-based investing, factor-based investing and evidence-based investing. Some have coined factor-based investing “smart beta” because it gives exposure to something other than the full market. It acknowledges the difficulty of using skill to find stocks that will outperform and instead relies on a basket of stocks to average out the performance of each. It reduces the cost and emotional pitfalls associated with using human research and management teams to select stocks. It also seeks to not only avoid the excesses of popular beliefs, but to systematically capitalize on these excesses. Investing 3.0 focuses on systems rather than opinions. It learns from behavioral finance theory where opportunities should exist and then analyzes data to test rules for capturing those opportunities. These rules are then followed mechanically, with the understanding that sometimes the crowd is right, but on average, the rules win. The cost of rules-based funds generally falls somewhere between those of index funds and actively managed funds.

ESG investing has two claims – first that it beneficially impacts the world through directing capital to where it will make a positive difference. Second is that by including an ESG framework in the investment process, investors will be rewarded with a better risk-adjusted financial return. We will examine these claims, one by one.

This blog helps readers understand “the Fed,” including its purpose, workings, and how its key decisions ripple through their personal financial landscape.

It is important to find an advisor that has the freedom and independence to find financial solutions that best fit your unique needs. Independent registered investment advisors (RIAs), one of the fastest growing segments in the industry, take the time to get to know you, to understand your personal and financial goals, and to build a relationship that is focused on helping you meet your investment objectives.

The Roth IRA Conversion is potentially one of the most powerful tax planning tools available. It allows taxpayers to choose when they want to realize income and pay taxes. Shifting your blend of funds to a better balance among taxable, tax-deferred and tax-free gives you more control over your taxes in the future. The Tax Cut and Jobs Act lowered tax rates through