DIY Personal & Retirement Financial Planning
Do-It-Yourself financial and investment planning Excel spreadsheet software
Why allow the financial industry to help itself to your money? This blog provides you with objective information that could solidify a lifelong commitment on our part to low cost investing. Low cost investing is how you keep more of your own investments for your family, instead of naively giving your money to the financial […]
Common stock equity market returns have varied widely in the past. The common stock equity risk premium has averaged about 4.1% from 1872 to 2000. The equity risk premium is the equity market return less the risk free rate of return. The risk free rate of return includes both the inflation rate and the risk […]
CLICK HERE TO READ THE SKILLED INVESTOR’s OTHER ARTICLES ABOUT THESE “10 FINANCIAL PLANNING STEPS IN THE RIGHT DIRECTION Appropriately setting your personal investment asset allocation in line with your personal investment risk tolerance is a critical decision for every individual investor. Personal Financial Planning Software Because the average risk-averse investor holds the average portfolio […]
CLICK HERE TO READ THE SKILLED INVESTOR’s OTHER ARTICLES ABOUT THESE “10 FINANCIAL PLANNING STEPS IN THE RIGHT DIRECTION.” Diversification is genuinely an investment “free lunch,†and it is a key contributor to improved investment risk management. Family Financial Planning Software for Consumers Diversification has become an axiom of personal investing, because the specific risks […]
CLICK HERE TO READ THE SKILLED INVESTOR’s OTHER ARTICLES ABOUT THESE “10 FINANCIAL PLANNING STEPS IN THE RIGHT DIRECTION.” Investors with different levels of risk tolerance are more satisfied with investment strategies that are better aligned with their risk preferences. Find Home Financial Planning Software Differences in investors’ personal risk tolerances mean that more risk-averse […]
Another kind of investment diversification that individual investors should consider important relates to the failure or corruption of the financial industry intermediaries and fiduciaries that hold individual investors’ securities. This meaning of diversification has nothing to do with scientific investment principles related to optimal portfolio diversification. However, it is still very important. Prudent investment practices […]
From the perspective of holding a well-diversified investment portfolio according to scientific investment principles, the objective of diversification is to minimize or eliminate ‘unsystematic risk’ or those risks that are not related to the price volatility of the overall securities markets. When people speak of investment diversification, they may mean different things. Therefore, clear definitions […]
Efficient market pricing is the theory that all known information is already reflected in current securities prices. Efficient securities market pricing has become very widely accepted within the investment community. The preponderance of evidence is that securities markets are efficient and tend to reflect available information. Whether you believe markets are efficient is very important […]
The securities markets provide an evolving consensus of the risk-adjusted value of particular securities. By understanding how the markets value securities, individual investors can chose more durable investment strategies Judging the potential usefulness of different investment strategies requires some understanding of what the public securities markets really do. This article discusses how the markets price […]
The Birth of Yet Another Darn “Asset Class” – “Infrastructure” Recently, The Skilled Investor published two articles: The first article discussed how the financial industry keeps manufacturing new asset classes for brokers and investment advisors to sell to individual investors. The Skilled Investor raised the question of whether these new asset classes are likely to […]
Hear ye, Hear Ye, individual investors: Be wary of new investment asset classes – A Tip from The Skilled Investor Many promoters in the financial services industry have shown a strong proclivity in recent years to invent and to market supposedly “new” investment asset classes. Industry advocates will claim that these new asset classes deserve […]
Your personal tolerance for investment risk should drive your asset allocation decision – A Tip from The Skilled Investor Your tolerance for investment risk is a relative thing. Few people like investment risk, but some can handle it better than others do. The more investment risk you can and are willing to tolerate, the higher […]
Passive index investment strategies are superior, because they narrow the range of outcomes and lower your investment risk A previous article, “The Solution – ONLY follow financial strategies that are scientific, passive, diversified, savings focused, risk controlled, low cost, and tax efficient,†suggested that individuals are much better off with a well-considered financial viewpoint. A […]
VeriPlan helps you make more optimal decisions about the tradeoffs between investment risk, investment return, and personal savings Too often decisions about risk-adjusted investing and asset allocation are over-simplified with a few questions about your risk tolerance. Typically, this superficial process will be followed quickly by the offer of a canned, off-the-shelf asset allocation scheme […]
Complete portfolio diversification is always a better idea. On average, the securities markets will not pay you to hold any skewed subset of the overall market. Doing so is just a gamble that may or may not pay off. You should not expect to be paid any more for the added risk and anxiety. Find […]
Build Investment Asset Buffers to Protect Yourself from Market Volatility You may be just as nervous as the next person is about investment risk. However, the coverage of your future expenses by your accumulated assets will determine whether you can actually manage, when risk really happens. Find Home Financial Planning Software A previous article, “The […]
You must stay invested in the securities markets to earn market return risk premiums Securities markets pay risk premiums to risk takers You have to have your money invested and at risk to be paid a risk premium. Attempting to avoid risk or losses by jumping in and out to “time the markets” does not […]
For Individual Investors Risk-Free Investment Money Is Fantasy Money Securities with low investment risk and high investment returns are just fantasies. No “risk-free” investment money is consistently and reliably available to individuals. Luck dominates skill in the securities markets. Clever investment selection is vastly over-hyped, and only the promoters tend to benefit. On average over […]