ACTION POINT
READ: THE SECOND MACHINE AGE
READ THE SECOND MACHINE AGE: WORK, PROGRESS AND PROSPERITY IN A TIME OF BRILLIANT TECHNOLOGIES
CONSIDER AN EQUALLY WEIGHTED INDEX ETF
CONSIDER AN EQUALLY WEIGHTED INDEX ETF
- Equal dollar weight to all stocks in S&P 500
- Primary advantage over market-cap weighting is underweighting of potentially expensive mega-cap stocks and overweighting of smaller cap stocks
IF YOU WANT TO BEAT THE MARKET, YOU HAVE TO DO SOMETHING DIFFERENT FROM THE MARKET
IF YOU WANT TO BEAT THE MARKET, YOU HAVE TO DO SOMETHING DIFFERENT FROM THE MARKET
- In less transparent, smaller, less liquid markets active managers can still make a difference
- A combination of index funds & actively managed funds in areas such as corporate & municipal bonds, small cap stocks, & internationally based companies still makes sense
CONSIDER SOME PREFERRED STOCKS FOR YOUR PORTFOLIO
CONSIDER SOME PREFERRED STOCKS FOR YOUR PORTFOLIO
PREFERRED STOCKS:
- A kind of hybrid security, sits between bonds and stocks in company’s capitalization structure
- Junior to bonds, but senior to common stocks in claims on assets
- Currently yield more than investment grade bond equivalents
- Bond interest is taxed at regular personal income tax rate
- Most preferred stock dividends taxed at lower long-term capital gains rate
Burt Malkiel’s: “The ‘Preferred’ Path to Higher Returns”
Connect
Connect with us on the following social media platforms.