Modern Portfolio Theory is about diversification: combining multiple investments (stocks or bonds) that zigs with another that zags, and possibly a third that zogs. Believers in MPT investing believe that diversification is your very best friend. Modern Portfolio Theory is the key to maximizing return with minimal risk. What the theory says is that…(Read More)
While the numbers can get complex, interchange-plus pricing is simple. The pricing model consists of two parts: an “interchange” and a “plus.” “Interchange” is the percentage of the transaction that must be paid to both the issuing bank and the credit card association. Because your credit card processor has to pay this charge, they…(Read More)
A merchant on tiered pricing schedule is overpaying for their credit and debit card processing. Tiered pricing means the merchant account provider states a low base rate (say 1.49% + a $0.25 transaction fee) for processing. The low base rate is generally meant to be enticing. However, the under-the-breath caveat for the…(Read More)
Our clients are always asking: Why don’t we deploy all cash immediately? Why do we hold a larger cash reserve than most other investment advisors? We believe our clients will do better if they wait for investments to come to us rather than chasing after us. We tend to get better buys if we…(Read More)
The cash level in the portfolios we manage has never ceased to be a topic of conversation with potential clients, given the recent run-up of the stock market after Brexit and after the 2016 presidential election. We tell potential clients that the cash reserves have played a strategic role in our firm’s investment…(Read More)
When we first engage with our clients, they typically ask us this question – what is the economic outlook — short-term and long-term? And this was the case, prior to the Brexit referendum in where United Kingdom decided to withdraw from the European Union (EU) and after the election of Donald Trump as the President…(Read More)
Depending on whom and when, we ask, we’ll get different answers. During the Internet bubble in the early 2000s, investment risk didn’t mean losing money; it meant making less than someone else. What many people feared was bumping into another person who was getting richer even quicker by day-trading dot-com stocks…(Read More)
There is a reason other investors and investment professionals overlook the importance of inflation. Following a thorough examination of my own retirement investor tim schmidt, a veteran investor and entrepreneur who protects his wealth using an unconventional approach that is realistic and simple to implement, IRA investing expert Tim Schmidt has unveiled his guide to…(Read More)
Removing the effects of inflation from the return of an investment allows our clients to see the true purchasing potential of our investment selections, without external economic forces. For example, say our firm chooses to hold a bond that returned 4% over one year. Examining only the return shows that this bond earned a positive…(Read More)