The personal finance category includes the usual topics that a certified financial planner would study and then provide advice on (planning, statements, time value of money, education funding, investments, retirement, income tax, etc.
Last Revision: November 20, 2022 Asset Class Performance: Introduction Understanding asset class performance is an important part of assembling the proper investment portfolio mix. This post analyzes the historical performance of various assets using ETF and Mutual Fund proxies. Its purpose is to show the historical ranked returns of several asset classes. the volatility […]
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Last Update: November 7, 2022 Introduction This post provides a broad review of available investment asset classes. The sec.gov glossary defines an investment as “..money that is put at risk for the purpose of making a profit”. In this post, we’ll review the various investment choices available to United States citizens. I think there are
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Last Update: November 6, 2022 The Power of Personal Financial Statements This post describes two very important tools that every person should utilize: The personal Balance Sheet (Financial Position) and the personal Income/Expense (Cash Flow) Sheet (or Statement). You cannot improve your financial situation if you don’t track and measure it. Recall from my Accounting Primer
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Last Revision: February 2, 2024 Introduction You need to learn a little bit of accounting. It involves keeping track of the “numbers” and trying to understand them to gauge/track performance and make future plans. Your personal budget and financial plan is all about accounting, as well as the businesses you invest in and perhaps even
Last Revision: September 29,2022 Introduction The power of compounding allows money to grow exponentially over time. That is, over time, the growth accelerates! So start investing (for yourself or your kids) as early as possible to maximize the amount of money you’ll have in the future. Schematic 1: Compounding – (a) grows exponentially by (bx)
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Last Revision: August 31, 2022 Introduction In this post, I’ll provide a basic description of corporate stocks and bonds. I’ll first introduce them in the context of the overall cash flow in a corporation, and then I’ll provide some key characteristics for each. Why should we care about this? Why is this important? Well, humans own,
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Introduction This article defines Capitalism and its tools of implementation: Economics, Finance, and Accounting. Economics, Finance, and Accounting explain the flow of money and assets in society. Corporations, the engines of growth in capitalistic systems, utilize these concepts/tools/techniques to maintain and increase our standard of living. Similarly, individuals can use a baseline understanding of these
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Last Revision: October 17, 2022 Summary In seven graphs, this post shows 94 years of expected returns for various stock and bond allocations. These graphs plot annualized returns for 3, 5, 7, 10, 15, and 20 rolling yearly periods and show that: Variability of outcomes increases (risk increases) as the proportion of stocks relative to
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Last Revision: October 17, 2022 Summary Moving average (rolling average) computations help us analyze trends. They are often applied to time series data analysis where short term fluctuations are dampened out. As a result, the investor gleans further insight by studying the “smoothed” data. This post shows how to compute the moving average with two
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Last Revision: August 14, 2022 Summary This post describes how the long term performance of the S&P 500 Total Return Index is affected when some of the best days are removed. Introduction I was recently perusing Chapter 2 of my copy of Charles D. Ellis’s book, “Winning the Losers Game” (3rd Edition, New York,McGraw-Hill,1998). The
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