This 48 Minute Podcast Explains The Investing Revolution
Teachers often complain that investing is one of their most challenging topics to teach and surprise, surprise, it is an area that students struggle with understanding too. So much jargon (P/E ratios, dividends, IRRs, oh my), so many choices (thousands of stocks and mutual funds to choose from) and so little experience. It’s no wonder that it can seem so overwhelming. Yet there is another way to think about investing and it has one major difference from the existing way that it is taught...
Chart: What Is Risk?
By Tim Ranzetta
|
Jul 30, 2017
|
Chart of the Week, Research, Index Funds, Investing, Current Events
From Vanguard:
I love this chart because it provides such a clear relationship between risk and return. You want more risk (say 100% stocks), well you better be prepared for great years (54.2% was the best year from 1926-2013) and be able to stomach big down years (down 43.1%) without hopping out. It also demonstrates the most important decision that an investor will make is their asset allocation or their split between stocks and bonds. Note also that stocks here doesn’t refer to picking...
For Your Listening Pleasure, The Top 10 NGPF Podcasts
By Tim Ranzetta
|
Jul 25, 2017
|
Podcasts, Credit Scores, Credit Cards, Index Funds, Investing, Mutual Funds, Current Events, Credit Reports, Featured Teachers, Entrepreneurship
The NGPF Podcast started almost two years ago (and almost 100 podcast segments later) allowed me to “scratch my own itch.” To anyone who knows me, I love talking finance and since I was young I was always told that I had a voice (and a face) for radio. I thought why not try this “podcasting thing” and see what happens. My thinking was “How much fun would it be to reach out to interesting people, including educators, researchers, columnists, finance experts, authors,...
Question: How Risky Is The Stock Market?
By Tim Ranzetta
|
Jul 20, 2017
|
Behavioral Finance, Question of the Day, Research, Index Funds, Investing, Stocks, Chart of the Week
Answer: It depends on your time horizon. Short term, it’s risky. Long-term, not so much.
Great chart here (from Barclays) demonstrates how your probability of making money (“gains”) in the stock market increases the longer your time horizon:
“This chart shows the proportion of gains and losses we observe for the same investment (the MSCI World Developed Equities Index) as we change our monitoring horizon from 1 day to 5 years:”
Let me explain:
First, the MCSI...
Cartoons: What Can Dilbert Teach Us About Investing?
By Tim Ranzetta
|
Jul 18, 2017
|
Cartoons, Research, Index Funds, Investing, Teaching Strategies, Stocks, Current Events
I was doing some research for an upcoming presentation and looking for ways to bring some levity to that “heavy” topic of investing. I didn’t realize that Dilbert could be such a great source of investing advice but I found myself nodding my head in agreement as I enjoyed this series of cartoons:
Message: Don’t mistake an increase in the stock price with “pure genius” when your stock pick may have benefitted from an overall increase in the level of the stock...
What Would You Do If You Owned the World's Best Investing Contract?
By Tim Ranzetta
|
Jul 11, 2017
|
Investing, Research, Index Funds, Current Events, Article, Excel activities
Hat tip to Sid Sharma for pointing out this fascinating article. Imagine knowing stock prices one week into the future? Better yet, imagine getting these future stock prices every week for the rest of your life. Such is the plight of Max Herve-George as featured in this story in the Independent:
George, 25, is not a rogue trader. He is not a financial genius. He is just a man who has the life-long right to make investments with Aviva France that are guaranteed to succeed – to Aviva’s...
A Simple Approach to Investing (Podcast and Article)
By Tim Ranzetta
|
Jul 10, 2017
|
Investing, Research, Personal Finance, Index Funds, Current Events, Podcasts
I just got back from a ride to the coast listening to Meb Faber’s podcast with surgeon and investor Bill Bernstein. I have read a bunch of Bill’s books (Intelligent Asset Allocator, Four Pillars of Investing, Investor’s Manifesto) and he has had quite an impact on my approach to investing (index funds, tilt towards small cap and value). Bill has a great quote in the podcast that really resonated with me: “Investing is simple but not easy.”
First, the simple. He...
Question: Why Should Investors Diversify Their Investments?
This chart reminded why diversification makes a whole lot of sense (hat tip to Big Picture Blog for highlighting it):
Let me explain:
Each asset class is represented by a different color
Purple = Emerging Market stocks from developing economies like Brazil, Russia, India and
Blue = Small Capitalization (or Small Cap) U.S. Stocks
Dark Gray = International Stocks (from developed economies like Germany, England and Japan)
Red = Real Estate Investment Trusts (REITs)
Orange = Large Capitalization...
NGPF Podcast: Tim Talks to Kiplinger Editor and Author Janet Bodnar
It was great to have Kiplinger editor Janet Bodnar on the podcast recently. As a newly minted college graduate, I recall leafing through a Kiplinger magazine (pre-internet) and benefitting from their practical, easy to understand financial advice. As an editor, columnist and author, Janet has an amazing depth of knowledge about personal finance. We focused our conversation on what we should be teaching young people about money as well as the importance of encouraging women to develop...
The Retail Industry Changed Last Week...NGPF Has Resources Aligned To These Current Events
|
Jun 18, 2017
|
Current Events, Career, Index Funds, Investing, Financial Literacy, Stocks, Purchase Decisions, Economics
This has been a big week of news related to the Retail Industry in the U.S., with implications for the economy, jobs, shoppers, and investors. This post will explain the big events for the week, their implications for you and your students while also providing activities and lessons that are aligned to these current events.
What’s Happening?
US Retail Sales declined month-over-month in May, suffering its biggest decline in 16 months. Coupled with lower inflation, this data suggests...
Decision Tree: Active vs. Passive
By Tim Ranzetta
|
Jun 12, 2017
|
Chart of the Week, Behavioral Finance, Question of the Day, Research, Index Funds, Mutual Funds, Current Events
Sometimes a simple model or flow chart elucidates a complex question. Here is one example of that principle (from Mr. Zepczynski’s blog):
Questions:
What are the three questions that you have to answer in the affirmative (with a YES) in order to be an “active investor?”
Which of the three questions do you think is most difficult to answer? easiest to answer?
What is meant by market efficiency? Can you think of examples when the markets may NOT have been efficient?
How...
Podcasts For Those Long Car Rides...What I Have Been Listening To
By Tim Ranzetta
|
Jun 02, 2017
|
Audio Resource, Behavioral Finance, Index Funds, Investing, Current Events, Podcasts, Entrepreneurship
Lots of drive time this week, which means lots of good podcast listening. Here are four that I thought you would enjoy:
For those looking for entrepreneurial focused podcasts, my new FAVE is Masters of Scale with Reid Hoffman (VC at Greylock and founder of LinkedIn). Here are the two that I have listened to with their key points that stuck:
Mark Zuckerberg (Facebook): Learn about the importance of launching “imperfect products” and then listening intently to your customers to...
Index Funds: What's the Catch?
Hat tip to Meb Faber for compiling this list of S&P500 Index Funds:
So, what’s the catch?
Each fund holds the same stocks in the S&P500
Yet each charges a different fee for basically doing the same thing. If there was ever a commodity investment product, it would be an S&P500 Fund! Remember that this fee is taken out of fund returns EVERY year so it has a compounding effect over time.
Why do they charge a different fee?
Because investors allow them to by not comparing...
What I'm Reading This Memorial Day Weekend
By Tim Ranzetta
|
May 26, 2017
|
Credit Cards, Behavioral Finance, Index Funds, Debit Cards, Current Events
I love long weekends to catch up on some reading, here’s what has my attention this week:
The Other Difference Between Jeans and Mutual Funds (Bloomberg); identifies reasons for Vanguard’s recent domination of the mutual fund industry: “The majority of funds are actively managed and 80 percent or more of them routinely fail to beat their benchmarks net of fees. Clearly, there’s an incredibly low probability that investors will get what they’re paying for. That realization...
NGPF Podcast: Tim Talks To Wealthfront Co-Founder and CEO, Andy Rachleff
Thanks to Andy Rachleff for this great conversation on the NGPF podcast recently. To say Andy has had an amazing career is an understatement. To name just a few of his roles: Founder of a premier venture capital firm (Benchmark), successful venture capitalist, sought after entrepreneurship instructor (Stanford Graduate School of Business) and currently a co-founder and CEO of a financial services disrupter (Wealthfront). Andy shares the insights he has gained over his illustrious career as well...
