What We're Reading

 

 

 

Has Business Left Milton Friedman Behind?
On September 13, 1970, the New York Times Magazine published an essay by the economist Milton Friedman titled “The Social Responsibility of Business is to Increase Its Profits.” It laid out what came to be known as the Friedman Doctrine — a call to arms for American free-market capitalism and arguably the most consequential economic idea, for better or worse, of the latter part of the 20th century. Fifty years later, Mr. Friedman’s seminal essay continues to stoke debate among business leaders and policymakers — many of whom now seek to rebuke his view as leading to a generation of profiteering companies at the expense of society, exacerbating inequality.
 

 

Four Questions to Help Demystify Your Relationship with Money
Jennifer Risher took a job in campus recruiting at Microsoft in 1991. She was 25 and given stock options worth several hundred thousand dollars. While working there, she met her husband, David, who had more stock options than she did. He later left to work for Amazon when it was still just selling books and got even more valuable options there. In a few years, they were worth tens of millions of dollars and on their way to a comfortable life. When Ms. Risher looks back, was it luck or good decisions that helped her land that Microsoft job?
 

The Fed Is Raising A Spoiled Teenager
Thirteen years ago last month (June 2007), the Fed Funds interest rate peaked at 5.25% and since then has been steadily declining. Apart from one short rate hike cycle in 2018, The Federal Reserve Bank (The Fed), has consistently reduced interest rates and implemented what is known as accommodative monetary policy. This accommodative policy has led stock investors to become dependent on lower rates to help them justify investing in stocks. In the absence of lower interest rates and Central Bank accommodation, as we saw in 2018 and in February/March of this year, stock prices struggled.
 

The Mystery of High Stock Prices
From the Department of Curiosities: On Tuesday, as the number of new coronavirus cases continued to spike to record levels, the stock market closed out its strongest quarter in more than two decades.
 

How the Coronavirus Has Shaped my View of the World — and my Future in it
What is the difference between a hero and a saint?” my ethics teacher asked. He paused, waiting for a response. I switched my Zoom screen to gallery view. One student was doing his laundry. Another texted me to joke that she had turned off her camera to cook an omelet. A third, eyes downcast, was checking his phone. One brave student unmuted her microphone to answer, but as she began to speak, another student interjected, unintentionally forcing the first student to mute herself once more. I was supposed to begin college in September but am taking a gap year instead.
 

Stock Market Legend Who Called 3 Financial Bubbles Says This One is the ‘Real McCoy,’ This is ‘Crazy Stuff’
That is Jeremy Grantham, co-founder and chief investment strategist at Boston-based money manager Grantham, Mayo, Van Otterloo & Co., offering up a stark warning to speculators driving the stock market to new heights amid the greatest pandemic of the past century. “This is really the real McCoy, this is crazy stuff,” said Grantham during a Wednesday afternoon interview on CNBC that appeared to knock some of the stuffing out of a market that had been drifting along listlessly on Wednesday.
 

A Father’s Letter to His Kid: The 9 Money and Life Lessons Most People Learn Too Late in Life
On June 3, 2019, my wife and I welcomed our daughter into the world. She’s barely old enough to walk, so her job (mostly eating and sleeping) hasn’t changed much. But, one day, she’ll need some money and life advice. As a father who has spent much of his career studying and writing about money, behavioral finance and business, this is what I’ll tell her...
 

Capital Group 2020 Mid-Year Outlook
The decade-long economic expansion did not end with a whimper. The coronavirus brought it to a screeching halt. U.S. GDP fell 5.0% in the first quarter, and a steeper decline is likely in the second quarter. More bad news lies ahead in the short term, starting with the tragic human cost. Historic unemployment will likely have a lasting impact on the economy, and many businesses are failing. The path to economic recovery will depend on the course of the virus and public health response. “I expect a more gradual U-shaped recovery with bumps along the way,” U.S. economist Jared Franz explains. “But, as the economy begins to open more broadly, there will likely be a V-shape in some industries like travel and dining.”
 

Why a Rise in Telecommuting May Boost Home Sales in Vacation Spots
Real estate has long been tied to job growth. In the past decade, home prices have surged in the urban cores of hot labor markets, as more and more people were drawn to live near the abundance of high-paying jobs in big cities like San Francisco, New York, and Boston. But what happens when good jobs no longer have a fixed location? We may soon find out.
 

You Now Get Almost Nothing for Your Money, but It Could Be Worse
In this crisis, money is priceless, yet banks and money market funds will pay you close to zero in interest for years. That’s if everything turns out well.
 

What Is The Stock Market Even For Anymore?
How could it be that stocks were heading higher — after a steep sell-off, of course — in the face of a global pandemic and what’s shaping up to be the worst economic downturn since the Great Depression? Wall Streeters were quick with answers: The Federal Reserve was pumping more than $1 trillion into the markets to stave off a financial meltdown, and besides, with bond yields at record lows, investors didn’t really have any palatable alternatives to stocks as places to put their money. Still, it was jarring, even macabre, to watch the market soar while tens of thousands of Americans were dying of Covid-19 and millions were losing their jobs as a consequence of the nation’s economic shutdown.
 

The Coronavirus Crisis Will Bust Up and Reshape Higher Education - For Better or for Worse
There were no barbed debates in the classroom these past couple of months. No nervy, ecstatic runs through the March Madness basketball tournament. No glorious midnight rambles across the campus green. The coronavirus pandemic ripped the heart out of the American college experience — and it may be some time before it beats again in full measure. Colleges and universities have lost staggering sums; a few may never recover. And while many are cautiously planning to re-open their campuses in the fall, others have vowed to remain shuttered for the semester. But for all the uncertainty lingering over the academy, there is a strange clarity, too.
 

Pandemic Has Increased Money Anxiety. Therapists Hope to Cure That.
Dale Mackey closed her event space in Knoxville, Tenn., a week before the state issued its orders to end large gatherings. She did not think about the economic ramifications of shuttering her business, the Central Collective; she said it was the right thing to do to reduce the spread of the virus.
 

For Millions of Americans, the Coronavirus Pandemic Will Make Retiring Harder
Labor economist Teresa Ghilarducci began studying retirement in 2008, when the Great Recession was making it impossible for millions of Americans to retire. “The phenomenon of Granny working in McDonald’s really started to ramp up,” said Ghilarducci, who leads the Retirement Equity Lab at The New School in New York. Yet, as bad as it was then, she sees the current Covid-19 recession making life even more uncertain and even more difficult for those in their 50s, 60s and 70s. By her calculations, the pandemic will force another 3.1 million older workers into poverty in their retirement, with many forced to choose between their health and their need for a paycheck.
 

Martin Wolf: After the Coronavirus Pandemic
The FT's Martin Wolf explains what the world could look like when the epidemic is over.
 

Check Out Your State and Maybe Sell its Tax-Exempt Bonds
Rent strikes. Moratoriums on foreclosures. A collapse in the tax revenues that support municipal bonds. The suppliers of capital—landlords, banks, bondholders—are about to experience some unpleasantness. This report will look at prospects for the third group, savers who lend money to states and municipalities. To give away the ending: Tax-exempt bonds are dangerous.
 

We Are Living in a Failed State
When the virus came here, it found a country with serious underlying conditions, and it exploited them ruthlessly. Chronic ills—a corrupt political class, a sclerotic bureaucracy, a heartless economy, a divided and distracted public—had gone untreated for years. We had learned to live, uncomfortably, with the symptoms. It took the scale and intimacy of a pandemic to expose their severity—to shock Americans with the recognition that we are in the high-risk category.
 

SNHU to cut tuition from $31,000 to $10,000, revamp on-campus learning
Southern New Hampshire University, known for being on the cutting edge of collegiate learning, plans to slash tuition for incoming freshmen as it drastically revamps how it conducts on-campus learning beginning in the fall. As part of the changes, tuition will be cut 61%, from $31,000 to $10,000 starting in the 2021-2022 academic year.
 

Billionaire Ray Dalio says coronavirus marks the start of a ‘new future’
Billionaire hedge fund manager Ray Dalio has said that while the coronavirus outbreak is devastating, it may also be a turning point in history — one that could pave the way for greater societal progress. In a live LinkedIn interview Tuesday, the Bridgewater Associates founder highlighted the devastating human toll of the virus, which has so far infected more than 2.5 million globally, and its wide-reaching economic repercussions. 
 

COVID-19 Will Permanently Change The Way Every Generation Lives—Here’s How
This worldwide pandemic has brought with it public health crises, global economic upheaval and widespread uncertainty. Even though the acute threat of COVID-19 will pass, things will not return completely to normal. The virus and the economic tumult that accompanies it are transformative events and will likely change lifestyle and financial choices for every generation.
 

Under Pressure
On April 14, 1988, Captain Paul Rinn was the commanding officer of the USS Samuel B. Roberts when it struck a mine in the Persian Gulf. The resulting explosion tore a 21-foot hole in the side of the frigate. Almost immediately, the ship began taking on water and multiple fires broke out.
 

Why Long Term Investors Should Never Sell Stocks in a Panic
The adage “keep calm and carry on” might, in the end, be the best advice for investors to follow during times of extreme market volatility such as the present. While it might seem counterintuitive to sit back and relax while stocks post swift and steep losses, for investors with longer-term time frames it typically pays to wait it out. 
 

27 Things To Do Now
Times like these test the mettle of investors. Want to pass the test? Here are 27 things to do now. Given the current environment, this article contains many ideas that you may wish to consider. It's important to remember though, all investors are unique, and not all ideas will be appropriate for everyone. 


Rob Lovelace on What a Recovery Could Look Like
What does the world look like in 2022? It’s a guidepost that’s driving Capital Group Vice Chairman Rob Lovelace as markets remain volatile and the world copes with COVID-19.


A Message from Chairman and CEO Paul Reilly
Rarely in our history have we – as individuals, as companies, as countries and as a global society – faced such uncertainty. Over the last few weeks, the COVID-19 pandemic has resulted in rapidly changing circumstances and accelerated decision-making, leaving many fearful of what’s to come. While we are inarguably witnesses to a major trial for our increasingly connected world, we are also participants. Participants who must actively consider how our actions affect one another, and our collective future. By being informed, remaining calm and making measured decisions, each of us can have an impact on the outcome of this situation.

 

Capital CEO Tim Armour on Weathering the Coronavirus
Rising fears over the continued spread of the coronavirus have led to a sharp stock market decline as investors grapple with its impact on the global economy. On Monday, March 9, in reaction to news of the virus spread and the recent oil shock, Standard & Poor’s 500 Composite Index fell 7.6%, triggering a 15-minute trading halt. In this interview, Capital Group Chairman and CEO Tim Armour offers his perspective on the latest events and what Capital is doing in portfolios to help guard against market volatility.


Time to Buy, Says GMO
GMO, the investment firm co-founded by Jeremy Grantham, sees buying opportunities in a stock market roiled by coronavirus fears. “There are not a lot of historical pandemics to look at,” Ben Inker, head of GMO’s asset allocation team, said Thursday in a phone interview. “This is the kind of event that, as we saw over the last few weeks in China, can have an extreme short-term impact on economic activity.”
 

The Gig Economy Has Never Been Tested by a Pandemic
The shadow of the new coronavirus finally reached American shores this week, as markets jittered downward and new cases crept up. The scope of any outbreak here is not clear, but experts suspect that the virus will become widespread. While the disease, known as COVID-19, is a global phenomenon, the response to it is necessarily local, and divvied up among more than 2,600 local health departments in the U.S.
 

Retired, or Hoping to Be, and Saddled With Student Loans
When Patrick Donohue retired in May after a 20-year career in customer service at AT&T, he and his wife, Kay, didn’t celebrate. Instead, they argued over which pension option was better: obtaining a large portion right away or scheduling small monthly payments. At issue was whether the lump sum might free them from paying further interest on the $97,932 they borrowed from the federal government so their four daughters could attend college, or if doing so would mean sacrificing their long-term financial stability.
 

Don't Lose It
Here's the least surprising thing you’ll read this week: You can’t control the financial markets. They’re driven by news—and we simply don’t know what news we’ll get in the weeks and months ahead, whether it’s about the spread of the coronavirus, its impact on the global economy or something else entirely.
 

Thoughts on the Market - Market Volatility: Coronavirus
The market impact continues to display three dynamics in the midst of the coronavirus outbreak: a flight to quality, bias toward defensives over cyclicals, and a heightened negative impact based on proximity to the most impacted regions.
 

When You Were Born > Everything Else
What is the most important factor behind one’s investing experience? Is it their ability to analyze a business, their temperament, or their network? It’s none of these things. For almost all investors, the most important driver of investment returns is the year you were born, and therefore how old you are when you began investing.
 

COVID-19 Cases Span the Globe, but Fatality Rate Appears Low
“Fatality rates are still pretty low, historically speaking,” says Healthcare Policy Analyst Chris Meekins, “but there is a bigger impact than I think people appreciate.”
 

The Great Affordability Crisis Breaking America
In the 2010s, the national unemployment rate dropped from a high of 9.9 percent to its current rate of just 3.5 percent. The economy expanded each and every year. Wages picked up for high-income workers as soon as the Great Recession ended, and picked up for lower-income workers in the second half of the decade. Americans’ confidence in the economy hit its highest point since 2000, right before the dot-com bubble burst. The headline economic numbers looked good, if not great.
 

High-Speed Traders Cost Regular Investors Almost $5 Billion A Year, Study Says
Traders and hedge funds who use high-speed methods to gain an advantage in the stock market impose a “tax” on other investors, according to a study released Monday, costing as much as $5 billion per year across global exchanges.
 

Your Credit Score May Soon Change. Here's Why. 
Your credit score — that all-important passport within the financial world — may be about to change. And it won’t necessarily be because of anything you did or didn’t do. The Fair Isaac Corporation, the company that creates the widely used three-digit FICO score, is tweaking its formula. Consumers in good financial standing should see their scores bounce a bit higher. But millions of people already in financial distress may experience a fall — meaning they’ll have more trouble getting loans or will pay more for them.
 

Capital Group Outlook 2020
A long-term perspective on markets and economies.
 

Why It's So Hard to Forecast the Economy
The U.S. economy has experienced its slowest recovery from a recession in the post-World War II era, and the longer it lasts the more evidence there is that normal cyclical patterns are missing. And their absence means market participants shouldn’t rely on them to divine the economy’s future.


An Unkind Act
As if on cue, Ebenezer Scrooge recently showed up in Washington, DC. The result wasn’t pretty. A bill known as the SECURE Act, a favorite of the insurance industry, had been stuck in Congress all year. But suddenly, on Dec. 20, it got tacked onto another bill and signed into law. As far as I can tell, the primary beneficiaries of this new law, which heavily impacts retirement plans, will be the IRS and the insurance industry—but probably not you.
 

We're Getting Old, But We're Not Doing Anything About It
One of the paradoxes of this presidential campaign is that while many of the candidates are in their eighth decade of life, fundamental issues associated with the aging of American society are still receiving relatively little attention from the public, the press and politicians themselves. In 2031, the oldest baby boomers will turn 85, entering the land of the “old old” and facing exponentially higher risk for dementia, serious physical disabilities and long-term dependency.
 

The Decade in Retirement: Wealthy Americans Moved Further Ahead
Retirement in America has become a tale of two very different realities in the decade now drawing to a close. In 2010, the economy was just beginning to recover from the worst recession and financial crisis in recent memory. The unemployment rate was high, the stock market was coming back and millions of workers were worried that their retirement plans were ruined. Since then, a robust economic rebound has put some Americans back on solid footing for retirement, but progress has been uneven.
 

It’s Possible the US Economy is Not ‘Late Cycle’ But Rather Just Recharging
The idea that we are late in the economic and financial market cycle is one that even most Wall Street bulls won’t dispute. After all, when the economic expansion surpasses a decade to become the longest ever and the S&P 500 has delivered a compounded return of nearly 18% a year since March 2009, how can the cycle not be considered pretty mature? Yet it’s not quite that simple. 
 

You're Tracked Everywhere You Go Online. Use This Guide to Fight Back.
Here are some mildly terrifying things I learned when I recently did an online privacy checkup: Google was sharing my creditworthiness with third parties. If you want Target to stop sharing your information with marketers, you have to call them. And, my favorite: If you would like Hearst, the publishing giant, to stop sharing your physical mailing address with third parties, you have to mail a physical letter with your request to the company’s lawyers. Cool cool cool.
 

Breaking Bad
We all do things that make us feel good right now, but which aren’t so good for us over the long haul. Yes, even me. Yes, even you. Some of this behavior stems from hardwired instincts passed down to us from our hunter-gatherer ancestors, like our tendency to consume whenever we can and to focus too much on today, while giving short shrift to tomorrow. Other damaging behavior is the result of habits we’ve developed, often learned from our parents, that we’re now trying to unlearn.
 

The 100-Year Family: Here Are Some Tips for Becoming One
Dennis Jaffe, a sociologist by training, has spent years trying to figure out the answer to a pressing question: what makes a hundred-year family? The question attempts to confront an adage that exists in many cultures and languages and is often attributed to Andrew Carnegie: “Shirt sleeves to shirt sleeves in three generations.” It refers to the fleeting nature of wealth and the all-too-common tendency for one generation to make it, another to waste it and a third to end up without it.
 

Is College Worth It? A Georgetown Study Measures Return on Investment — With Some Surprising Results
When Larry Burrill started college, his goal was to walk into a job that paid well after graduation. He was coming from a family of humble means and knew he would be paying his way through school. He chose Maine Maritime Academy, set in a historic town miles down a peninsula, because he knew graduates were earning starting salaries double or triple what he could otherwise expect to make.
 

How FedEx Cut Its Tax Bill to $0
In the 2017 fiscal year, FedEx owed more than $1.5 billion in taxes. The next year, it owed nothing. What changed was the Trump administration’s tax cut — for which the company had lobbied hard. The public face of its lobbying effort, which included a tax proposal of its own, was FedEx’s founder and chief executive, Frederick Smith, who repeatedly took to the airwaves to champion the power of tax cuts. “If you make the United States a better place to invest, there is no question in my mind that we would see a renaissance of capital investment,” he said on an August 2017 radio show hosted by Larry Kudlow, who is now chairman of the National Economic Council.
 

Wait a Minute. How Can They Afford That When I Can't?
I’ve done it and you probably have, too: looked at a neighbor or friend who seemed to be in roughly the same financial bracket and wondered, “How do they do it?” How do they afford the elaborate remodel and the luxury vacations they’re bragging about on their Instagram accounts and the private school tuition? The feeling is envy, but it’s mixed with curiosity. And it often comes with a large dollop of self-criticism. They somehow must be better at managing their money than my husband and me. What are we doing wrong?
 

Here Are Your New Income Tax Brackets for 2020
The IRS released the federal tax rates and income brackets for 2020 on Wednesday. The seven tax rates remain unchanged, while the income limits have been adjusted for inflation.
 

What Proposed IRA Update Could Mean for Your Retirement and Your Kids
New legislation making its way through Congress has the potential to create significant changes around retirement planning and individual retirement accounts (IRAs). The Setting Every Community Up for Retirement Enhancement (SECURE) Act passed the House in May of 2019, but has been stalled in the Senate ever since (as of the end of October 2019). However, analysts say it could find new momentum as part of one of several spending bills on the docket this fall.
 

When the Best Deal is What You Give Away
My father grew up with few material possessions. As a result, he appreciates things far more than anyone I know. Throughout my life, I watched him meticulously clean and repair just about everything we owned, be it a radio, a coat or a blender. His attention to detail extended particularly to cars. No matter what vehicle we owned, it was always kept in pristine condition, inside and out.
 

Majority of Americans Say Parents Are Doing Too Much for Their Young Adult Children
Financial independence is one of the many markers used to designate the crossover from childhood into young adulthood, and it’s a milestone most Americans (64%) think young adults should reach by the time they are 22 years old, according to a new Pew Research Center study. But that’s not the reality for most young adults who’ve reached this age.
 

Biggest US Index Funds Oppose Most Climate Proposals in Shareholder Votes
The far-reaching impacts of climate change on companies have investors pressing corporate leaders for action to minimize environmental damage and to maximize disclosure of risks to their businesses. The threats range from more frequent floods or wildfires that imperil major assets to regulations that could undermine profits. While votes on climate-related shareholder resolutions often take center stage at corporate annual meetings, they seldom draw support from the two top U.S. index fund firms, BlackRock and Vanguard Group. The reticence of the two largest index fund providers to back these proposals draws criticism from some investors and climate activists.
 

Here's How to Keep Health-care Costs Down in Retirement
Retirees will spend a significant amount of money on health care. Still, many older Americans don’t plan properly for it. A healthy male-female couple retiring at age 65 in 2019 can now expect to shell out $285,000 on health-care expenses in retirement, according to Fidelity Investments’ annual analysis.
 

The Middle Class Crunch: A Look at Four Family Budgets
Most Americans think of themselves as middle class. For many, the line between a stable life and a fragile one is thinning.
 

A Long-Despised and Risky Economic Doctrine Is Now a Hot Idea
It’s like a design competition. Hardly anyone thinks central banks can fix a stalling world economy with their current tools. So some of the biggest names in finance are trying to invent new ones. The proposals so far -- including recent entries by billionaire Ray Dalio and monetary policy maven Stanley Fischer -- have one thing in common: They foresee the once all-powerful central bankers taking a more junior role, and collaborating with governments.
 

Stanford Psychology Expert: This is the No. 1 Skill Parents Need to Teach Their Kids—But Most Don’t
As parents, we all want to raise kids who are smart and focused, especially in a world where digital distraction seems to be inescapable. (Even tech titans like Steve Jobs and Bill Gates have strategies for limiting their children’s screen time.) Why? Because in the future, there will be two kinds of people in the world: Those who let their attention and lives be controlled and coerced by others and those who proudly call themselves “indistractable.”
 

How Paying for College is Changing Middle-Class Life
Everyone knows that higher education is expensive. The average annual price tag for attending a private, four-year American college is now around $50,000. To pay that, most students receive some combination of financial aid and loans, but schools expect parents to reach into their bank accounts, too. Paying for college, however, is taking a toll on American families in ways that are more profound and less appreciated than even the financial cost conveys. It has fundamentally changed the experience of being middle class in this country.
 

As Costs Mount, States Scramble for New Ways to Pay for Late-In-Life Care
It’s the late-in-life financial hit that can wipe out your savings and your children’s inheritance. Yet few in middle age want to think about, or prepare for, a time when they’ll need “long-term care” — help with walking, dressing, or going to the bathroom.
 

Investing in a Negative Interest Rate Environment
Predicting interest rate moves is notoriously difficult but I’m increasingly coming around to the idea that it’s only a matter of time until the U.S. joins much of the developed world with negative nominal interest rates in government bonds.
 

The Hidden Money Grab In The SECURE Act
On May 23, 2019 the House of Representatives overwhelmingly passed the SECURE Act (Setting Every Community Up for Retirement Enhancement). A more appropriate name for the bill would be the Extreme Death-Tax for IRA and Retirement Plan Owners Act, because it gives the IRS carte blanche to confiscate up to one third of your IRA and retirement plans.  In other words, it’s a money grab.
 

Were You Blindsided by Your 2018 Taxes? The IRS Has a New Tool That Can Help
This year’s tax season was one of angst and anger. Many folks were distraught that they owed the IRS money. Others were disappointed that their refunds were significantly less than in previous years. Many people were not happy with the changes ushered in under the 2017 Tax Cuts and Jobs Act. Although the law nearly doubled the standard deduction, it also removed personal exemptions and limited or discontinued other popular deductions. 


You Are Probably Overconfident. (If You Skip This, Doubly So.)
When we’re betting money on the stock market, it’s important to remind ourselves of something called the self-serving bias, where we take credit when things go well and cast blame elsewhere when they don’t. One of the reasons these biases are so scary is that expertise — the kind professionals are often so certain they have — doesn’t solve the problem. In fact, it might even make it worse.
 

7 of Your Most Burning Questions on Social Security (With Answers)
People have lots of questions about Social Security: Will it still be around when I retire? How much will I get? How does the spousal benefit work? That’s not surprising. No government program is more important to so many Americans. This year, Social Security is expected to pay $1.1 trillion to 69 million recipients of retirement and disability benefits and Supplemental Security Income. Nearly all Americans pay into the program and can expect to receive a benefit at some point in their lives. And it is the largest retirement income source for a majority of older households.
 

Exploring Education: Should K-12 Schools Teach Financial Literacy?
In the first part of our 4-part series on K-12 education, we look at what role schools should play in helping students learn life skills for money management. Several states require financial literacy classes for high school students, and Senator Hassan has co-sponsored federal legislation to support financial literacy classes in schools. We look at the role of schools in helping students learn to manage money: what skills do students need, and what are N.H. schools doing? 
 

Beware, The IRS is Eyeing Your Inherited Money
One of the perils of being well-off is the constant risk that the federal government and/or your friendly state and local tax collectors will figure out new and different ways to snatch more of your wealth. Especially wealth that you earned the old-fashioned way: by inheriting it. To raise your paranoia to the appropriate level, here are two new things to worry about.
 

80% of the Stock Market is Now on Autopilot
Passive investments control about 60% of the equity assets, while quantitative funds -- those relying on trend-following models instead of fundamental research -- now account for 20% of the market share, according to estimates from J.P. Morgan.
 

International Outlook: Think All the Best Stocks Are in the U.S.? Think Again.
Since 2009, the top 50 companies with the best annual returns each year were overwhelmingly based outside the United States. In many of those years, 80% to 90% carried a non-U.S. address. That means if you had decided to ignore European, Asian and other non-U.S. stocks, you would have missed a shot at many of the best opportunities.
 

U.S. Outlook: The Expansion Gets Extra Innings
What a difference six months makes. In the most consequential change for financial markets since the start of the year, the U.S. Federal Reserve put the brakes on its three-year-old interest rate tightening effort. The major policy shift in January provided an immediate boost to sentiment, as investors concluded that the central bank will keep rates steady for the rest of the year.
 

Developing Story
I’m a fan of emerging stock markets—for two key reasons. But I also have qualms—for two key reasons.
 

The World Economy is Falling Back Into its Post-Crisis Funk
There might be no such thing as an oracle, but there is the bond market. And really, what’s the difference? It is, after all, the closest thing there is to a clairvoyant when it comes to the economy. Which is bad news right now, because it’s telling us that the whole world is turning Japanese. What do we mean by that? Well, almost 30 years ago, Japan was the first major country to go through the boom, bust and stagnation cycle that the rest of the world has gotten to know and hate so much recently.
 

Retirees Might Run Out of Money 10 Years Before They Die
One of the toughest problems retirees face is making sure their money lasts as long as they do. From the U.S. to Europe, Australia and Japan, retirement account balances aren’t increasing fast enough to cover rising life expectancy, the World Economic Forum warns in a report published Thursday. The result could be workers outliving their savings by as much as a decade or more.
 

No, Renting Isn't Throwing Your Money Away
Home ownership is part of the stereotypical American Dream. Renting the place you live in has traditionally had a less romantic connotation. On this episode of Good Money, we show why renting shouldn't get such a bad rap, and why in many cases it's less of a headache, and more affordable, to rent than buy. 
 

Senior Scams Proliferate as Fraudsters Deploy New Tactics and Technologies
Last month, a pair of Swampscott police officers were dispatched to a local Stop & Shop to rescue an older man from Lynn. The man was rattled: A stranger had called to warn that his Social Security number was compromised and he needed to pay $2,500 to protect his identity. The man had withdrawn the money from a nearby bank and was trying to convert it to gift cards, as the caller instructed. A watchful supermarket manager alerted police.
 

A Financial Checklist for Your Newly Minted High School Graduate
The summer after high school graduation inevitably includes monthslong encounters with various to-do lists. Extra-long-sheet purchases and milk crates for future collegians. A résumé for job seekers. Thank-you notes for all. But let me suggest one more itemized offering: a list of financial tasks. If you want to set your child up properly for college, work, military service and the years beyond, there are several things you ought to do, help them do or teach them before too long.
 

The Economy is Booming. So is Financial Stress. 
Federal Reserve research provides lots of useful data about U.S. financial health, but its broad focus sometimes obscures intriguing specifics. Now a new study by the St. Louis Federal Reserve Bank has dug beneath the national averages to take a close look at family balance sheets. In a paper called "The Unequal Recovery: Measuring Financial Distress by ZIP Code," researchers cleverly analyzed the big numbers to identify financial distress among households.
 

You're Probably Not Ready to Retire - Psychologically
Retirement is a major transition that unfolds over many years, as we move from the life we know into the life we will get to know. Many pre-retirees do not fully comprehend how dramatically their lives will change. ... Many people are simply not psychologically ready to retire, even if they'refinancially able.
 

Annuities Can Undermine Teachers' Retirement Savings
Imagine walking down the jetway to board an airplane and making a right to head for your seat, only to have the flight attendant turn you around and direct you toward the cockpit. “You’ll be flying the plane today,” she says.
 

Here’s When Giving Financial Support to an Adult Child Crosses Into Coddling
As parents, my husband and I have struggled with finding the right balance between protecting our children and letting them learn things the hard way. To raise children to become responsible adults, you have to be supportive and encouraging. You also have to set limits — and you have to let them fail. It’s through those stumbles that they experience the natural consequences of bad decision-making. There also comes a time when you have to back away financially so that your children can learn to become self-sufficient. But knowing when to withdraw your support can be hard.
 

Man Credited With Calling the 2008 Crisis Says the Next 20 Years in the Stock Market Will ‘Break a Lot of Hearts’
Jeremy Grantham, an investor credited with predicting the 2000 and 2008 downturns, told CNBC on Thursday that investors should get inured to lackluster returns in the stock market for the next two decades, after a century of handsome gains.
 

Here's How the Super Rich Teach Their Kids About Money
When it comes to teaching kids about money, the super rich are different from average Americans. But it’s not only about the amount of wealth they have.
 

Most Financial Advisors Lack a Succession Plan, a Crucial Aspect of Running a Firm
By 2016, certified financial planner Kirk Francis had helped numerous small business owners implement strategies for exiting work. Yet he didn’t have a succession plan for his own firm. “I sat there going, ‘Hmmm … the cobbler’s son has no shoes,’” said Francis, CEO and chief compliance officer at Financial Life Advisors in San Antonio. Soon after, by buying another practice and taking on a partner, Francis made a plan that ensures his business will continue and his clients will be taken care of when he is no longer there to do so, whether it’s due to some unfortunate event or he’s simply retired as planned.
 





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