Investing
Everything we've published on investing: guides first, then articles and quick answers.
Asset Allocation and Rebalancing: Keeping Your Risk Where You Set It
A 60/40 portfolio left alone through a few good stock years quietly becomes a 70/30 portfolio. Here is how drift happens, what rebalancing does and doesn't do, and the main ways people rebalance.
Guide, 4 min readBond Basics: Why Bond Prices Fall When Rates Rise, and What Duration Tells You
Bonds are often described as safe, yet bond funds can lose money. The reason is the seesaw between interest rates and prices. Here is how it works, with prices calculated for three maturities.
Guide, 5 min readDollar-Cost Averaging vs. Lump Sum: What the Math Actually Says
If you have a large sum to invest, should you put it in all at once or spread it out? We ran both approaches through three market paths to show who wins, when, and why.
Guide, 4 min readIndex Funds and ETFs Explained: How They Work and What to Compare
Index funds track a market index instead of picking investments. ETFs and mutual funds are two ways to hold them. Here is how they work, what they cost, and the differences that actually matter.
Guide, 2 min readWhat a 1% Fee Really Costs: The Compounding Math Behind Investment Fees
A one-percent annual fee sounds small. Over thirty years of monthly saving it can take a six-figure bite. Here is the arithmetic, the places fees hide, and how to total yours.
Guide, 10 min readInvestment Risk and Volatility: Why Average Returns Mislead and Losses Hurt More Than Gains Help
Two investments with the same average return can end up worlds apart if one swings more. Here is volatility drag, the math of recovering from losses, and what risk really means for your money.
Guide, 4 min readTax-Loss Harvesting Explained: Using Investment Losses to Lower Taxes
Selling investments at a loss can offset capital gains and, within limits, ordinary income. It often defers taxes rather than eliminating them. Here's how it works, the wash sale rule, and a worked example.
Guide, 2 min readTaxable vs. Tax-Advantaged Accounts: How Account Type Changes Long-Term Results
The same investment can end up with very different after-tax results depending on the account it's held in. Here's how tax drag works, a 30-year comparison, and how people decide where to put which investments.
Guide, 2 min readBehavioral Mistakes Investors Make, and What They Cost in Numbers
Selling after a crash and buying back after a recovery can turn a temporary loss into a permanent one. Here is a worked example of the panic-sell gap, plus other common behavioral traps.
Article, 2 min readBond Ladders Explained: Matching Bonds to When You Need the Money
A bond ladder spreads money across individual bonds or CDs that mature in different years. It gives predictable cash at set times and reduces the risk of reinvesting everything at once. Here is how to build one.
Article, 2 min readCompound Interest Explained, With the Ten-Year Head Start Problem
Compound interest pays returns on past returns. Starting ten years earlier can double the result, even with less money put in. Here is the math.
Article, 2 min readCost Basis Explained: How Gains Are Measured When You Sell
Your taxable gain is the sale price minus your cost basis. When you've bought shares at different prices, the method used to pick which shares you sold changes the gain. Here is an example.
Article, 2 min readDiversification Explained: Why Combining Investments Can Lower Risk
Holding investments that don't move in lockstep reduces how much a portfolio swings, often without reducing expected return proportionally. Here is the math of correlation and the limits of diversification.
Article, 2 min readDividends and Total Return: Why Reinvesting Changes the Result
An investment's total return is price change plus dividends. Reinvesting dividends instead of spending them can add up to a large difference over decades. Here is the math.
Article, 2 min readExpense Ratios Explained: What They Include, What They Don't, and What They Cost in Dollars
An expense ratio is a fund's annual operating cost as a percentage of assets. It's deducted quietly from returns. Here is how it works in dollars and the costs it leaves out.
Article, 1 min readInflation and Real Returns: What Your Money Is Actually Earning
A 6% return with 3% inflation is not a 6% gain in what you can buy. Here is how to calculate real returns, what inflation does to cash over decades, and why it matters for long-term plans.
Article, 3 min readRisk Tolerance vs. Risk Capacity: Two Different Questions About the Same Portfolio
Risk tolerance is how much volatility you can stomach. Risk capacity is how much loss your finances can absorb. Here is why both matter, with an example of what a 35% stock decline means in dollars.
Article, 2 min readThe Rule of 72: A Shortcut That Works, and Where It Breaks
Divide 72 by an interest rate and you get roughly how many years it takes money to double. Here is how accurate that is, why it works, and how to use it on debt too.
Article, 3 min readTarget-Date Funds Explained: Glide Paths, Costs, and What "To" vs. "Through" Means
Target-date funds automatically shift from stocks to bonds as a target year approaches. Here is how glide paths work, why two funds with the same year can hold very different mixes, and what to check before relying on one.
Article, 2 min readThe Wash Sale Rule: When a Loss Doesn't Count (Yet)
Selling at a loss and buying the same investment back within 30 days can disallow the loss for tax purposes. Here is how the rule works, with a worked example, and what happens to the disallowed loss.
Article, 3 min read