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Shrugging off the noise regarding market highs and lows

Confusion tends to reign when markets hit record highs. Advisers and brokers trying to be helpful feel compelled to suggest "taking profits" largely to demonstrate that they (advisers and brokers) are being useful. Investors are tempted to act on the advice, remembering how sorry they have been in the past when the market tanked and they later regretted that they weren't sitting on cash to buy back in. Dream on.

Millennial Money Management

In the movie, “American Beauty,” Kevin Spacey plays the role of a husband whose marriage (to Annette Benning) is unraveling. At one point, he looks around the living room and says, “This is not life. This is just stuff.” I thought about that comment as a read Patrick O’Shaughnessy’s new book, “Millennial Money.” How can a young person new to the work force be convinced that setting some earnings aside is worth whatever pleasure they might otherwise gain from indulging in poor spending habits --- spending money on just stuff?

Quiz can detect how risky you are

The 1983 movie “Risky Business” starring Tom Cruise came to mind recently when I heard the report that inclination to take risk is all about personality more than anything else. In the movie, the situation gets out of hand when parents leave town for a weekend leaving their high school senior with no adult supervision. Meanwhile, the party, including the Porsche plunging into Lake Michigan, turns out to be a success and everyone has a wonderful time --- except for a few misunderstandings.

Our water problems demand attention

On a recent trip to Chicago, I learned about the seven-year "big dig" engineering project in the 1890s that reversed the flow of the city's major river. Instead of carrying the waste from people and stockyards into Lake Michigan, where it contaminated the source of drinking water, the reversed river sent Lake Michigan pouring down tributaries of the Mississippi and into the Gulf of Mexico.

Calculating future retirement income

Back in the late '80s, I "invented" a cardboard thumbwheel offering a low-tech illustration of what retirement would look like given different retirement savings levels. Picture me, in that disco era, with some pieces of cardboard and an utility knife cutting little boxes and then filling in numbers on the wheel part to show up in the right holes. As if the front side wasn't enough, the back side included more information that scrolled out in even more windows.

Drug problems

As a columnist writing about retirement-related financial issues, it helps to have my 98-year-old father serve as a laboratory allowing a glimpse into the challenges that seniors have to confront. The latest issue I've had to face is that his Medicare Part D drug coverage lapsed 15 months ago for reasons that make no sense. So, I’m working to put Humpty Dumpty back together again. More on this in a moment.

Taking stock in retirement plan

Sometimes, you just have to love attorneys. I know, I know. As a profession, they are frequently maligned --- plus there are all those lawyer jokes. However, the lawsuit that a plaintiff’s attorney launched is now on its way to the U.S. Supreme Court and has caught my attention. The issue involves alleged excessive fees charged to retirement plan participants who work for Southern California Edison. The law firm who filed the suit has a track record of winning settlements in favor of participants from a wide range of Fortune 500 companies who had gouged their employees.

Dusting off some stock market history

At the Bonneville Salt Flats in Utah, I struck up a conversation with someone who had cobbled together a car out of what looked like 50-gallon aluminum drums welded together -- with a bubble windshield on the front and a huge engine on the back. Expecting to exceed 200 miles per hour, he was applying duct tape to a wing to improve his car's aerodynamics. "Bear in mind," he said, "Everything I know about aerodynamics I've learned by extending my hand out the window of a moving car."

Time for the counterintuitive investor to look for losers

The fact that mutual funds investing in small companies have been lagging the rest of the stock market for the past year prompted me to recall the situation back in 1999. That year marked the swan song of the dot-com boom. Small cap value funds earned zero for the year while Large Cap Growth funds averaged a 60 percent return. The Janus mutual fund company, which offered a number of successful growth-oriented funds, was capturing over one-third of all the new money invested in the entire mutual fund industry.

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