Tesla’s stock value is up a whopping 600% in 2020 alone, with a current market cap of over $550 billion dollars and a P/E ratio of over 1,000. At this moment, it is worth more than Disney, Walmart, or Berkshire Hathaway. Even better, the S&P 500 index managers decided not to allow Tesla in until they were pretty much forced to, as Tesla was now in the top 10 of all US companies. Tesla went up 40% after that announcement because they know that after 12/21 every single S&P 500 index fund and ETF will have to sell a little bit of hundreds of companies and put over 1% of their total assets into Tesla stock (an estimated flurry of $100 billion in mandated trades). Meanwhile, the Vanguard Total… [Read More...]

Allan Roth is one of the financial planners whose independent opinions I have come to respect, and he shares seven takeaways from 40 years of financial planning. Financial Planning is an industry trade magazine targeted at (obviously) professional financial planners, but many of the articles are quite useful for DIY investors as well. Read the article first, but here are my personal interpretations of his lessons (not his words): A solid income and frugality both matter, but either one is not enough. He’s advised a high-income doctor with a net worth smaller than an emergency fund, and a 10X millionaire who is still afraid to spend their money. Both needed help. Many people overestimate their ability to handle real-world risk. He has seen firsthand how … [Read More...]

Updated bank bonus details, 10% cash back categories still active. If have you a SoFi Money account, don’t miss that they are offering earn 10% cash back on select Grocery: Whole Foods, Trader Joe’s, Instacart and Subscriptions: Netflix, Disney+, Spotify when you pay with SoFi Money from 7/1 through 9/30. Max cash back is $50 for Grocery ($500 in purchases) and $50 for Subscriptions ($500 in purchases). I like that they keep coming up with new bonuses. If you opened a SoFi Money account prior to 6/9/2020, this is available to all members. If you opened a SoFi Money account after 6/9/2020, you need $500+ in monthly deposits (from any source, bank transfers okay) in order to qualify for the 10% cash back program. Looks like they added a… [Read More...]

New 10% cash back categories. If have you a SoFi Money account, don’t miss that they are offering earn 10% cash back on select Grocery: Whole Foods, Trader Joe’s, Instacart and Subscriptions: Netflix, Disney+, Spotify when you pay with SoFi Money from 7/1 through 9/30. Max cash back is $50 for Grocery ($500 in purchases) and $50 for Subscriptions ($500 in purchases). I like that they keep coming up with new bonuses. If you opened a SoFi Money account prior to 6/9/2020, this is available to all members. If you opened a SoFi Money account after 6/9/2020, you need $500+ in monthly deposits (from any source, bank transfers okay) in order to qualify for the 10% cash back program. Looks like they added a new hoop with a grandfather… [Read More...]

(I don’t know if this was targeted, but SoFi Invest (not Money) just sent me an email about a 1% deposit match bonus for the month of June for existing customers. The maximum bonus is $5,000 (if you move over $500,000). You cannot withdraw the net deposits for 90 days. Getting 1% of your deposit in 90 days is roughly the same as 4% annualized, which beats the interest rate on any cash equivalent even if you didn’t invest in anything.) Updated. SoFi (“Social Finance”) has expanded from students loans into a cash management and stock brokerage account. They’ve also updated their bonuses for trying them out, and if you have a spouse/partner, you can refer each other (in addition to … [Read More...]

Updated. As noted in my post on best online brokers, my favorite option in the now-crowded “robo-advisor” category is now M1 Finance. Here’s a quick rundown of what makes them different: Fully customizable. You pick your own target asset allocation “pie”. (You can add ETFs or individual stocks.) You can simply copy one of the many model portfolios out there, or customize it as you like. You have full control! M1 handles the boring stuff, like rebalancing or dividing a $100 contribution across 8 different ETFs. Here is my pie which I named the My Money Blog Portfolio. No commissions. Free stock/ETF trades with a low $100 minimum account size for taxable accounts and a $500 minimum for retirement accounts. 0.00%… [Read More...]

Michael Burry became famous (at least in investing circles) due to his bold bet against mortgage-backed securities in 2008 that was chronicled in The Big Short by Michael Lewis (later a movie). He’s been pretty quiet since but has resurfaced recently on Twitter due to his strong opinions on the pandemic lockdown. Due to his reputation as an independent thinker, he was also asked to share his recommended book reading list by user @thesis_11. I like to collect book recommendations and add them to my Amazon wishlist, so here’s his response in case it gets deleted later (I added the links): Intelligent Investor by Graham Common Stocks and Uncommon Profits by Fisher Why Stocks Go Up and Down by Pike Buffettology by Buffett and Clark … [Read More...]

2020 meeting live on 5/2 Saturday, 4pm Eastern. Instead of the usual bonanza, the 2020 Berkshire Hathaway Annual Shareholder Meeting will only include a private, brief Q&A session with Warren Buffett and Greg Abel (the likely next CEO), with questions from three selected journalists. As with last year, it will be streamed live on Yahoo Finance. The meeting starts at 4pm ET on 5/2 and the Q&A starts at 4:45 ET. There should be a recorded playback available afterward as well. Yahoo Finance is the exclusive online host of the 2020 Berkshire Hathaway Annual Shareholders Meeting which takes place on Saturday, May 2nd. Live coverage begins here at 4:00pmET. Investors and non-investors alike can witness history, live, as Berkshire Hathaway Chairman and CEO Warren Buffett shares his unscripted views on… [Read More...]

Many investing articles basically keep telling you “Don’t worry! stocks always go up!”, but I appreciated the added perspective from the Morningstar article What Prior Market Crashes Can Teach Us About Navigating the Current One by Paul D. Kaplan and The Risk of a Lost Decade For Stocks by Movement Capital. Here is the growth of $1 in the US stock market since 1871, adjusted for inflation. The first takeaway is that severe stock market drops are not uncommon. Having the emotional fortitude that the drops are not permanent is important. This historical stock market return data provides clear evidence that market crashes aren’t as unique as one might have thought. The term “black turkey” is more apt, since they appear every so often—and today’s … [Read More...]

While we see the live price of the S&P 500 index everywhere, there is much less talk about its dividends. Dividends are an important component of the total return from stocks. I love seeing my quarterly dividend payments arrive every quarter, and combined with our reduced work income, they are enough to cover our household expenses. How reliable is the income stream from owning an S&P 500 index fund (or similar total market fund)? Here is the growth of the 12-month dividend per share of the S&P 500 on an inflation-adjusted basis (source). Looks pretty good overall, but how bad were those drops? Inside this Movement Capital article about managing sequence-of-return risk, I came across a helpful chart showing the historical drawdowns of dividends … [Read More...]

I’ve been sitting on this post for a week, but I’ll feel better just letting it out. When we talk about investing, a lot of it is about long-term thinking and exponential growth. There are many charts showing that the person who starts saving early and stops completely after 10/15 years does better than the person who waits around but eventually saves twice as much per year. Once the ball starts rolling, it’s hard to stop. Here is one example from ForUsAll.com: This is the power that comes from forced savings (pensions) and automated savings with default contributions (401k/403bs). Along the same lines, here’s a chart of Warren Buffet’s net worth over time from ValueWalk. Most of his money … [Read More...]