Weekend Reading – How To Park Your Cash: Short-Term Investing Hacks
Weekend Reading is a collection of Investment Research and Lifestyle topics from all corners of the Web.We source the highest quality insights from Wall Street and Main Street that you may apply to your investment process. Unlike the rest of Bankeronwheels.com, this series is provided without additional guidance. As usual, everything is to be used at your own risk. Below is the type of content we shortlist.
Invest Wisely section is dedicated to research on how to invest for the Long Run using Passive Investment Strategies. Read Topics related to (i) Portfolio Construction and Asset Allocation (ii) Acting wisely by avoiding behavioural traps and also (iii) publications that help understand how financial markets work.
Active Investing section relates to improving your knowledge about active investing. If you decide to sin, then sin only a little. Given ample evidence, combined active bets should be ideally a relatively small fraction of your portfolio. This section also includes Sustainable Investing. You can invest in a Socially Responsible way, but there are many ESG traps. Learn how to invest sustainably, and what it means for expected returns, with our definitive guide to sustainable investing.
Personal Finance section is dedicated to UK and European Products. It can also touch on other European jurisdictions outside the Euro-zone.
The one thing I will tell you is the worst investment you can have is cash. Everybody is talking about cash being king and all that sort of thing. Cash is going to become worth less over time... Cash is a bad investment over time.
INVEST WISELY
CONSTRUCT YOUR PORTFOLIO
Investing for the Short to Medium with UCITS iBonds ETFs (Bankeronwheels.com)
Have you ever considered matching bond cash flows with a life event, such as buying a house or covering kids’ tuition fees, using an ETF iBonds act like regular Bonds. The ETF will mature, and you will be repaid at a predetermined date. However, they offer several ETF advantages over regular bonds – they trade like stocks, are diversified, and don’t require high investment amounts to get started. So, who should buy them, and how do they work?
- How to Use Cash in a Portfolio (Morningstar)
- The 60/40 Portfolio is Alive & Well (A Wealth of Common Sense)
- Put Down the Dividends and Slowly Back Away (Excess Returns - 31 min)
- Dodging Dividend Disaster (Pension Craft - 18 min)
- In conversation with Itzhak Ben - David on ETFs & their role within your portfolio (Rational Reminder - 1 hr 25 min)
- Fun with Funds (Italian Leather Sofa)
UNDERSTAND FINANCIAL MARKETS
Cash is a terrible long-term investment, even at 5% interest (Ben Felix Podcast - 8 min)
With a 5% return on cash, why would anyone want to invest in stocks? True that cash feels good because its nominal value is stable – it feels safe, but is it counterintuitively extremely risky for long-term investors?
Lets find out!
HOW TO INVEST
- In conversation with Vanguard CIO on forecasting, diversification (Ritholtz - 1 hr)
- Aspects of investing that often go unsaid and underappreciated (Investment Talk)
- Not Even The Machines Are Rational (Joachim Klement)
- Do Major Projects and Investment Decisions Go Wrong for the Same Reasons? (Behavioural Investment)
Do Downturns Lead to Down Years ?(Dimensional Funds)
Stock market slides over a few days or months may lead investors to anticipate a down year. But the US stock market had positive returns, despite some notable dips in many of those years. The truth is, volatility is a normal part of investing. Tumbles may be scary, but they shouldn’t be surprising. In fact, a long-term focus can help investors keep perspective.
Read more on Dimensional Funds
Active Investing
FACTOR investing
Returns for the S&P 500 and Dimensional US Small Cap Value since 1927 (Dimensional Funds)
Anyone who’s ever bought a used car knows the importance of avoiding a cherry-picked depiction of history. Low mileage and regular oil changes don’t matter much if the seller fails to mention the car was once submerged in floodwater. Many investors have been drawn to the shiny-object stocks of the S&P 500 index on account of their recent performance—since 2010, the large cap S&P has outperformed US small cap value stocks by an annualized 1.7 percentage points. the decade of the dot-com bubble—had the lowest contribution from dividends of just 15%.
Read more on Dimensional
discretionary investing
Valuations, economy may favour value stocks (Vanguard)
As measured by the Standard & Poor’s 500 Index, U.S. stocks have risen more than 20% since they hit a trough in mid-October 2022—a dismal year that brought the S&P 500’s worst calendar-year decline since 2008 but just its second loss in 14 years. They’ve roughly doubled in value since the pandemic-induced low of March 2020. The extent and pace of the gains are enough to make the wary equity investor wonder: Where is there opportunity in the U.S. stock market?
Read more on Vanguard
7 key valuation lessons from Aswath Damodaran (Daniel)
Aswath Damodaran is the ‘Dean of Valuation.’
For almost four decades, he has been teaching valuation at NYU. He also teaches millions of people online.
Here are 7 Key Valuation Lessons from him
Read more on Twitter
ALTERNATIVE ASSET CLASSES
Is the UK housing market going to crash? (Pension Craft - 21 Min )
If we combine the cost of living crisis, soaring interest rates, and sky-high prices, it seems as if the UK housing market is set up for a big crash. This video looks at the reasons for and against an impending crash. And, also gives you some forecasts for UK house prices.
WALL STREET
Throwback- Buffet's First Televison Interview (Value Theory - 8 min)
Before he was the sage of Omaha, he was relatively camera shy. Yet, the universality of his simple investing strategy was as evident as it is today. Tune in for an insightful walk down memory lane as he talks: The most important quality of an investor and What he does that’s different to 90% of investors.
SUSTAINABLE investing
crypto
Looking at Bitcoin within a 60/40 portfolio. (Morningstar)
Bitcoin Index posted a 76.4% return through July 2023 in defiance of the gloomy narratives that haunt the rest of the cryptocurrency ecosystem. The trusty balanced portfolio has also beaten expectations as of late. So far in 2023, risk has paid handsomely. That fact may leave many investors wondering whether to add some extra firepower to their portfolio in the form of an allocation to bitcoin.
Read more on Morningstar
BAD BETS
FROM Bankeronwheels.com
Beat Most Investors with FREE ETF Master Guides
- Get Rich, Slowly but Surely – We designed Equity ETF selection frameworks and then picked the best funds in each category, so you don’t have to.
- Become a Passive Investing Ninja – Have no mercy for Financial Institutions. Cut TERs, Taxes, FX Fees and Invisible Costs.
- Licence to Yield – Which Bond ETFs for your goals? How do price change? Should you hedge currencies?
- Don’t get fooled by Wall Street – ESG Ratings are not designed to protect the planet. Adjusted for risk, ESG ETFs will also inevitably underperform. So how can you invest Sustainably?
From Bankeronwheels.com
Beat Most Investors with FREE ETF Master Guides
- Get Rich, Slowly but Surely – We designed Equity ETF selection frameworks and then picked the best funds in each category, so you don’t have to.
- Become a Passive Investing Ninja – Have no mercy for Financial Institutions. Cut TERs, Taxes, FX Fees and Invisible Costs.
- Licence to Yield – Which Bond ETFs for your goals? How do prices change? Should you hedge currencies?
- Don’t get fooled by Wall Street – ESG Ratings are not designed to protect the planet. Adjusted for risk, ESG ETFs will also inevitably underperform. So how can you invest Sustainably?
PERSONAL FINANCE
Wealth Management
Early Retirement
Cody Garrett is an advice-only financial planner passionate about helping families refine their path to financial independence (FI) as DIY investors. Cody specializes in comprehensive financial plan development, topic research, and personalized financial education.
On this podcast, he joins John Luskin to talk all things early retirement!
FINANCIAL PRODUCTS
COST OF LIVING
OUR Community
Question of the week
From Bankeronwheels.com
We Help You Avoid Costly Investing Mistakes.
Most coaching participants come from the EU or the UK.
But we have consistent demand from all around the world. We provided coaching sessions to individual investors stretching from Argentina to New Zealand, or Guatemala to Japan.
A significant part of our clients are professionals in the Tech sector, Lawyers or Doctors that want to avoid costly mistakes when investing.
We also coach 25-30 year old young professionals that want to maximise assets for early retirement. We also have a large group of entrepreneurs that e.g. receive large lump sums after selling their company and want to invest it in financial markets. We speak to Crypto millionaires that want to reduce their risks.
Finally, some of our coaching clients are in their 40s or 50s and want to set up customised, income-producing portfolios or create Bond ladders for their retirement.
Most of the coached investors are in the 25–60 year old range.
Yes, some of our coaching clients have shared reviews on Google.
Some considerations are included below. For more details, consult your regulator’s website.
A financial coach is:
- Trained but not regulated
- Skilled at reviewing your overall financial situation and goals
- Able to help you develop a financial plan to achieve those goals
- Happy to discuss the pros and cons of various financial products but can’t recommend a specific one for you
- Comfortable working with anyone, whatever their situation
- Going to charge for their time
A financial adviser is:
- Regulated and authorised by the regulator to recommend specific products to clients or is independent and able to offer ‘whole of market’ solutions
- Often, going to charge an annual management fee, typically 1-2% of their client’s assets with initial fees on top.
We are proud to say that our coaching service has empowered a number of clients to reconsider their financial advisers’ offerings. From our clients’ feedback, in a number of cases, clients were overcharged, and offered unsuitable products, often due to conflicts of interest. However, this is not a rule. The best choice between a financial coach and adviser depends on an individual’s unique circumstances, including their financial literacy, time availability, comfort with managing their finances, and complexity of their financial situation.
Beginners often ask us:
- How do I reach my goals – What investments do I need to take into consideration for e.g. Taking a Sabbatical, buying a House or saving for Early Retirement?
- When should I invest – I fear that investing a lump sum in this market may have a negative impact on my returns. How can timing of buying ETFs affect my performance?
- How do I Invest – What are the pro and cons of investing with a Bank? Why should I diversify brokers?
- What should I consider investing in – What are some risks of portfolio diversifiers like Gold or Crypto?
- Avoiding Extra Costs – I have shortlisted a few ETFs, can you help me to compare them before I decide which one to buy?
- Benchmarking – What are educated investors doing in a similar situation to mine?
We are flexible. For example, answering some of these questions could help you avoid very costly mistakes:
- Challenging My Portfolio – Here is my portfolio – what am I missing? What could derail my strategy?
- Accelerating My Understanding – What are inflation linked Bonds? How are they different to Nominal Bond ETFs? What makes them outperform? Why do some investors add small cap value stocks to their portfolios? I want to exclude Tobacco companies from my portfolio – what are my options? What is Factor Investing?
- Simplifying Portfolio Maintenance – How can I diversify my investments? What is historically highly correlated so that I can consider removing it to keep my portfolio simple? How do I perform rebalancing? Does frequency matter?
- Reducing Risks – I want to understand the risks of investments – what are the different measures and how does it impact me? What are the risks of different types of brokerage accounts?
- Understanding the Impact of Recent Events – How do recent events impact my portfolio? What can I do to protect my savings from shocks?
- Investing Goals – I am investing for a specific goal e.g. Early Retirement, what is the research saying about e.g. the amount I need to have accumulated, how much can I withdraw annually? What are some calculators available and how to run them? What are the assumptions/shortcomings of these models?
- Comparing Equivalent ETFs – I have certain constraints in my tax-wrapper and can only select certain funds (e.g. I live in France and limited to specific synthetic ETFs). Which ETF characteristics should I pay attention to?
From Bankeronwheels.com
Get personal help To Set up your portfolio
We Help You Avoid Costly Investing Mistakes.
Sometimes individual sessions are very helpful to get past your investing concerns. Our readers asked us to create coaching sessions. And we’re proud to say, that some of them even ditched their Financial Advisors, after experiencing the value we provide.
Most coaching participants come from the EU or the UK.
But we have consistent demand from all around the world. We provided coaching sessions to individual investors stretching from Argentina to New Zealand, or Guatemala to Japan.
A significant part of our clients are professionals in the Tech sector, Lawyers or Doctors that want to avoid costly mistakes when investing.
We also coach 25-30 year old young professionals that want to maximise assets for early retirement. We also have a large group of entrepreneurs that e.g. receive large lump sums after selling their company and want to invest it in financial markets. We speak to Crypto millionaires that want to reduce their risks.
Finally, some of our coaching clients are in their 40s or 50s and want to set up customised, income-producing portfolios or create Bond ladders for their retirement.
Most of the coached investors are in the 25–60 year old range.
Yes, some of our coaching clients have shared reviews on Google.
Some considerations are included below. For more details, consult your regulator’s website.
A financial coach is:
- Trained but not regulated
- Skilled at reviewing your overall financial situation and goals
- Able to help you develop a financial plan to achieve those goals
- Happy to discuss the pros and cons of various financial products but can’t recommend a specific one for you
- Comfortable working with anyone, whatever their situation
- Going to charge for their time
A financial adviser is:
- Regulated and authorised by the regulator to recommend specific products to clients or is independent and able to offer ‘whole of market’ solutions
- Often, going to charge an annual management fee, typically 1-2% of their client’s assets with initial fees on top.
We are proud to say that our coaching service has empowered a number of clients to reconsider their financial advisers’ offerings. From our clients’ feedback, in a number of cases, clients were overcharged, and offered unsuitable products, often due to conflicts of interest. However, this is not a rule. The best choice between a financial coach and adviser depends on an individual’s unique circumstances, including their financial literacy, time availability, comfort with managing their finances, and complexity of their financial situation.
Beginners often ask us:
- How do I reach my goals – What investments do I need to take into consideration for e.g. Taking a Sabbatical, buying a House or saving for Early Retirement?
- When should I invest – I fear that investing a lump sum in this market may have a negative impact on my returns. How can timing of buying ETFs affect my performance?
- How do I Invest – What are the pro and cons of investing with a Bank? Why should I diversify brokers?
- What should I consider investing in – What are some risks of portfolio diversifiers like Gold or Crypto?
- Avoiding Extra Costs – I have shortlisted a few ETFs, can you help me to compare them before I decide which one to buy?
- Benchmarking – What are educated investors doing in a similar situation to mine?
We are flexible. For example, answering some of these questions could help you avoid very costly mistakes:
- Challenging My Portfolio – Here is my portfolio – what am I missing? What could derail my strategy?
- Accelerating My Understanding – What are inflation linked Bonds? How are they different to Nominal Bond ETFs? What makes them outperform? Why do some investors add small cap value stocks to their portfolios? I want to exclude Tobacco companies from my portfolio – what are my options? What is Factor Investing?
- Simplifying Portfolio Maintenance – How can I diversify my investments? What is historically highly correlated so that I can consider removing it to keep my portfolio simple? How do I perform rebalancing? Does frequency matter?
- Reducing Risks – I want to understand the risks of investments – what are the different measures and how does it impact me? What are the risks of different types of brokerage accounts?
- Understanding the Impact of Recent Events – How do recent events impact my portfolio? What can I do to protect my savings from shocks?
- Investing Goals – I am investing for a specific goal e.g. Early Retirement, what is the research saying about e.g. the amount I need to have accumulated, how much can I withdraw annually? What are some calculators available and how to run them? What are the assumptions/shortcomings of these models?
- Comparing Equivalent ETFs – I have certain constraints in my tax-wrapper and can only select certain funds (e.g. I live in France and limited to specific synthetic ETFs). Which ETF characteristics should I pay attention to?
DESIGN YOUR LIFESTYLE
Personal Development
Justin Gary is an award-winning designer, author, speaker, and entrepreneur. He is CEO of Stone Blade Entertainment and creator of the innovative and award-winning Ascension deck-building game series. Explore the path less travelled, the phenomenon of magic, how analytical people can become creative people & much more!
Health & Wellness
CAREERS
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TECH AND SCIENCE
Travel
CYCLING TIBET – Spiritual, and Ballistic. (Bankeronwheels.com)
Raph has travelled the world with his bike in tow & it is nstural for him to be asked numerous questions related to his adventures. “What did you think of China?” is one of these questions. The answers are complex but a day from his life on the bike can give you some flavour. The highlight of this trip to China is without any doubt the Qinghai Province. Logistically, China was also the most challenging country on a bike. Here is why.
From Bankeronwheels.com
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miscellaneous
Inside Taiwan’s Strategy to Counter a Chinese Invasion (Wall Street Journal - 8 min)
For decades, Taiwan has looked to its east coast as a safe haven to survive a Chinese invasion until allies, particularly the U.S., can arrive to assist. In the east, Taiwan’s rugged mountain terrain also helps create a natural shield in the event of an attack. But China’s PLA activity on the island’s east has thrown that strategy into question. WSJ takes a look at how serious China’s threats to Taiwan’s east coast are and explores whether the island needs to change its defense strategy.
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(* Wheels & Dividends)
Good Luck and Keep’em* Rolling!
(* Wheels & Dividends)
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