NGPF Podcast: Morgan Housel discusses his new book "The Psychology of Money"
Morgan Housel is back for an encore performance on the NGPF Podcast to talk about his new book, The Psychology of Money. Morgan has that rare talent of making financial lessons memorable through incredible storytelling that weaves in history, psychology, sociology and even medicine. In fact, his book is a compilation of 19 of his favorite stories. Listen to this podcast and learn about his creative process, his favorite stories and the money lessons they teach and COVID-19's long-term impact on...
NGPF Podcast: Jonathan Clements says "carry on" while the markets turn bearish
It's advice my Dad would have appreciated as he would have seen this British war poster, "Keep Calm and Carry On," as a child during WWII. Jonathan and I had this conversation on Monday (the 9th) which now seems like eons ago. We pulled this together on short notice because I wanted listeners to get Jonathan's perspective on the recent market tumult. We discuss circuit breakers, oil markets, bear markets, investor psychology and what an investor should do in these uncertain times. I also...
NGPF Podcast: Author Roger Lowenstein discusses Warren Buffett, the subject of his book, The Making of An American Capitalist
The book, The Making of An American Capitalist, may be 25 years old but the subject, Warren Buffett, remains a fascinating character today. In this podcast. Roger shares what he discovered through his exhaustive research on Buffett which included conversations with neighbors in Omaha, college classmates and his early investors. You will learn about Buffett's habits, his talents and the characteristics of the businesses he invests in. With the gift of time, Roger also provides his...
Chart of the Week: The value of diversification in two charts
What makes investment diversification so difficult for us mere mortals is that you will never feel like you have the optimal portfolio and have that nagging frustration of "what if...". For example, while many investment professionals encourage investors to have some exposure to international stocks in their portfolio, that has not been a winning strategy for the past decade as the U.S. stock market has vastly outperformed the rest of the world as this chart indicates:
Note: MSCI ACWI is an all...
Chart of the Week: Investment Returns By Decade
I came across this cool gif on the Irrelevant Investor blog. Lots of percentages here which make this an interesting one for math teachers too!
Be sure to click on the image below to experience the GIF:
Notes:
Important: Given the multitude of asset classes here with some familiar and some unfamiliar, you may want to just focus on two bond proxies (5 Year U.S. Treasuries and Long-Term Corporate Bonds) and two stock proxies (S&P 500 and NASDAQ). Of course, if you cover other...
QoD: Walmart vs. Amazon: Which has been the better performing stock over the past five years?
Answer: AMAZON by a long shot!
Reviewing the chart, how much would your $100 investment five years ago have grown if you had invested in...
Amazon?
Walmart?
The overall stock market (S&P 500)?
Would you have been better off choosing between these 2 companies or just buying the overall stock market through an index fund?
Why do you think that Amazon has performed so much better than Walmart? (Hint: Do you think that online ecommerce is growing faster than “bricks and...
QoD: UPS vs. FedEx: Which company's stock has performed better over the past five years?
The unsung heroes of the holidays.
Answer:
Questions:
Reviewing the chart, how much would your $100 investment five years ago have grown if you had invested in...
UPS?
FedEx?
The overall stock market (S&P 500)?
Would you have been better off choosing between these 2 companies or just buying the overall stock market through an index fund?
What research could you do to find out what factors have impacted the stock prices for FedEx and UPS?
Here's the ready-to-go slides...
QoD: Starbucks vs. Dunkin Donuts: Which company's stock has performed better over the past five years?
People tend to be pretty vocal about their preferred "go-to" coffee spots. Who is winning the coffee war (from the investor's perspective)?
Answer: Starbucks.
Questions:
What factors do you think contribute to the very different market performance of these companies?
Starbucks is much larger and has a larger international presence. Do you think those factors are important?
Which do you personally prefer? Explain why you prefer it.
Would you make an investment decision based on a...
QoD: Which mutual funds have more investor dollars: actively managed funds or index funds?
By Tim Ranzetta
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Oct 20, 2019
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Question of the Day, Investing, Research, Index Funds, Mutual Funds
This question should be asked as part of your investing unit as it requires some prior knowledge.
Answer: Index Funds
Here's the ready-to-go slides for this Question of the Day that you can use in your classroom.
Questions:
If you saw an advertisement for a mutual fund that consistently “beats the market” (pick stocks that do better than the overall market), what questions would you ask?
90% of mutual funds that are active and trying to “beat the...
NGPF Podcast: Burton Malkiel discusses his book, Random Walk Down Wall Street, and the index fund revolution that followed
In 1973, Prof. Burton Malkiel's Random Walk Down Wall Street hit the bookshelves and the world of investing would never be the same again. Not only did Prof. Malkiel question the conventional wisdom that the "smart Wall Street money" knew best but he also made a revolutionary suggestion: give individual investors an opportunity to "buy the market." The foundation for the index fund revolution that followed had been laid and Prof. Malkiel would play a leading role. In this NGPF podcast, he...
WSJ Headline: Index Funds Are the New Kings of Wall Street (w/Resources To Teach Your Students Index Funds)
Index funds (funds that mimic popular stock market indices like the S&P 500) now have more assets under management then active funds trying to "beat the market." Per the WSJ:
Funds that track broad U.S. equity indexes hit $4.27 trillion in assets as of Aug. 31, according to research firm Morningstar Inc., giving them more money than stock-picking rivals for the first-ever monthly reporting period. Funds that try to beat the market had $4.25 trillion as of that date.
The passing...
Have you seen the new "What's New With _________?" posts?
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Aug 31, 2019
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Current Events, Credit Reports, Index Funds, Investing, Credit Cards, Checking Accounts, Career
We all know that things are always changing in the world of Personal Finance. We bring you a weekly reading list of news related to Personal Finance, Economics, and other topics relevant for teachers, but what if you want to hone in on what’s been happening in just one topic?
This year, the “What’s New With” series of blogs is a bit different than in the past. We are pulling in fewer articles on each topic, but going into more depth within the blog to explain what has...
Chart of the Week: Why Investment Fees Matter!
From Vanguard:
May want to find a way to cover up the ending balances after 30 years.
Question: Two investors start with $100,000 and earn a 6% return per year for 30 years:
One chooses a low-cost mutual fund with a cost of 0.25% (a.k.a. expense ratio) that is applied to their invested assets each year. Note that many index funds have even LOWER expense ratios).
The other chooses a higher-cost mutual fund of 0.63%, which is apparently the weighted average expense ratio for U.S....
QoD: How many of the 12 largest companies in 2000 were still one of the largest 12 in 2018?
Answer: 4
Exxon Mobil went from #2 to #11
Wal-Mart Stores went from #6 to #12
Microsoft went from #7 to #3
Johnson & Johnson went from #11 to #9
Questions:
Compare the list in 2000 to 2018. Write one sentence that describes how the economy has changed in the past 18 years based on changes in the largest companies. Which industries have grown the most?
How many of the top 12 companies on the list in 2018 are you familiar with?
How has the value of the three companies that...
Chart of the Week: Company Lifespan on the S&P 500
From Innosight's research on Creative Destruction:
Key insights include:
The 33-year average tenure of companies on the S&P 500 in 1964 narrowed to 24 years by 2016 and is forecast to shrink to just 12 years by 2027 (Chart 1).
Record private equity activity, a robust M&A market, and the growth of startups with billion-dollar valuations are leading indicators of future turbulence.
A gale force warning to leaders: at the current churn rate, about half of S&P 500 companies...
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