Category: Investments

This article first appeared on Forbes.com. Modern Portfolio Theory, the work of Markowitz, and Sharpe, and many, many others, is the foundation of how we think about finance and financial markets. Both Markowitz and Sharpe won the Nobel prize in Economics, and many of their intellectual descendants have done so as well. One of the […]

Filling a one-time need for cash from your Sensible-managed portfolio takes a little time. While you may be able to withdraw cash immediately from your bank account, an investment account is different. Allow me to fully explain this step-by-step process. The process begins when you contact your advisor with your cash request. Perhaps there are […]

In this installment of my series on employee benefits, I will cover employee stock purchase plans (ESPPs), which offer the ability to purchase employer stock through payroll deductions. Only about 30% of eligible participants take advantage of these plans, and on average, those who don’t participate miss out on over $3,000 per year[1]. You might […]

Every year, we review and update the preferred exchange-traded funds (ETFs) in Sensible Financial’s investment models. We focus on (1) minimizing tracking error, the difference in return between a fund and its benchmark index and (2) cost-efficiency – we want your investments to follow the model closely at the lowest possible cost. In our ETF […]

You may have heard that the stock market has been very volatile recently, with several days of significant declines. The drops in the US market on Monday, February 5th and Thursday, February 8th were especially large, around 4%, depending on the index. This followed a decline on February 2nd of a bit over 2%. To add […]

Edward Samp contributed extensively to this article. Many investors have become interested in the impact of their investment decisions on the world in which we live. While the primary objective of your investment strategy may be financial: e.g., allowing you to live comfortably in retirement or putting your children through college, some investors also desire […]

Many advisors tout the benefits of a “tax-free income” in retirement for those individuals with a Roth IRA. More important than tax-free income in retirement is the goal of reducing your lifetime tax burden by shifting income from one year to another through a Roth conversion. With the December 31st deadline for 2017 Roth conversions […]

[DISPLAY_ULTIMATE_SOCIAL_ICONS] In my last article I summarized the trailing 15 years of active management versus passive management performance data (spoiler alert: passive won). Looking solely at fund returns over that timeframe, we saw that the overwhelming majority of active managers trailed the performance of their relevant benchmarks. But returns are only part of the analysis. […]

At Sensible Financial, we get very excited about passive investing. Since we first opened our doors in 2002, we’ve recommended passive funds as the best option for clients interested in higher returns at lower risk. It was a pretty radical recommendation at the time. Since our first financial plan, things have changed quite a bit […]

Every year, Sensible Financial reviews each mutual fund holding to ensure that you are invested in the best possible funds consistent with your target allocation and investment strategy. In defining “best”, we consider two primary criteria: (1) cost and (2) tracking error relative to our target indices. 1). There are three primary cost categories for […]