Asset Classes
Stocks, bonds, real estate, gold, crypto, and REITs
Week 16 Day 1: What a Stock Actually Is
When you buy a stock, you own a piece of a company. Its profits are your profits. Its growth is your growth. That is the engine of wealth creation.
Read commentary →Week 16 Day 2: What a Bond Actually Is
When you buy a bond, you are lending money. The borrower pays you interest on a schedule and returns your principal at maturity. It is a contract, not a bet.
Read commentary →Week 16 Day 3: The Historical Scoreboard: Stocks Win by a Landslide
Since 1926, U.S. stocks have returned about 10% per year. Bonds have returned about 5%. Over decades, that 5% gap creates a chasm of wealth.
Read commentary →Week 16 Day 4: Why Bother With Bonds at All?
If stocks always win long-term, why hold bonds? Because your behavior during a crash matters more than your returns during a boom.
Read commentary →Week 16 Day 5: The Classic 60/40 Portfolio
60% stocks, 40% bonds. It is the most famous allocation in finance. It works, it has survived every crisis, and it is probably good enough.
Read commentary →Week 16 Day 6: Total Bond Market vs Individual Bonds
You do not need to pick individual bonds. A total bond market index fund like BND holds thousands of bonds across maturities and issuers for a few basis points.
Read commentary →Week 16 Day 7: Your Stock-to-Bond Ratio Is the Biggest Decision
Your asset allocation -- the split between stocks and bonds -- determines roughly 90% of your portfolio's variability. Everything else is a rounding error.
Read commentary →Week 17 Day 1: Gold Produces Nothing
Gold does not earn profits, pay dividends, or create products. Its value comes entirely from the belief that someone else will pay more for it later. Stocks earn money while you sleep.
Read commentary →Week 17 Day 2: Gold as Insurance, Not Investment
Gold belongs in your portfolio the way a fire extinguisher belongs in your kitchen. You hope you never need it, but if the world catches fire, you will be glad it is there.
Read commentary →Week 17 Day 3: The S&P 500: 500 Companies Working for You
The S&P 500 represents about 80% of U.S. stock market value. Investing in it means owning a slice of 500 companies that collectively employ millions and generate trillions in revenue.
Read commentary →Week 17 Day 4: Inflation-Adjusted: Gold's Real Story
Gold hit $850 per ounce in January 1980. Adjusted for inflation, that is about $3,200 in 2024 dollars. Gold only recently surpassed its 1980 peak in real terms -- 44 years later.
Read commentary →Week 17 Day 5: Why People Love Gold (And Why It Feels Right)
Gold is tangible in a world of abstractions. You can hold it, hide it, and it has been valued for 5,000 years. The emotional appeal is real even if the return is not.
Read commentary →Week 17 Day 6: How to Own Gold (If You Must)
If you want gold exposure, buy a low-cost ETF like IAU or GLDM. Do not buy physical coins from TV infomercials, and do not pay more than 0.25% in annual fees.
Read commentary →Week 17 Day 7: The Verdict: Stocks for Wealth, Gold for Insurance
Over any 20-year period, stocks have beaten gold. Over any crisis period, gold has often beaten stocks. The answer is not one or the other -- it is 90-95% stocks with 5-10% gold.
Read commentary →Week 18 Day 1: The Landlord Fantasy vs the Landlord Reality
Everyone loves the idea of rental income. Nobody loves the 2 AM phone call about a burst pipe. Real estate investing is a second job disguised as a passive investment.
Read commentary →Week 18 Day 2: REITs: Real Estate Without the Toilet Calls
Real Estate Investment Trusts own commercial properties -- offices, apartments, warehouses, hospitals, cell towers -- and pass 90% of income to shareholders. You collect rent checks without owning a single property.
Read commentary →Week 18 Day 3: Leverage: Why Real Estate Feels So Profitable
A 20% down payment means the bank puts up 80% of the money. When the property appreciates, you get 100% of the gain on 20% of the cost. Leverage is the secret sauce -- and the hidden danger.
Read commentary →Week 18 Day 4: Your Home Is Not an Investment
Your primary residence costs you money every month in mortgage interest, taxes, insurance, and maintenance. It is shelter first and a store of value second. Do not confuse living expenses with investing.
Read commentary →Week 18 Day 5: REITs vs Physical Property: The Head-to-Head
REITs offer instant diversification, daily liquidity, professional management, and no maintenance. Direct property offers tax benefits, leverage control, and the satisfaction of tangible ownership.
Read commentary →Week 18 Day 6: The REIT Building Blocks: VNQ, SCHH, and VNQI
Three low-cost ETFs give you exposure to the entire global real estate market for pennies. VNQ for U.S. REITs, VNQI for international, and SCHH as the cheapest option.
Read commentary →Week 18 Day 7: Real Estate in Your Portfolio: 5-10% Is Plenty
Real estate adds diversification and income to a stock-heavy portfolio. But it is not a primary wealth-building tool -- stocks do that. Keep real estate at 5-10% and let it play its supporting role.
Read commentary →Week 20 Day 1: Growth Stocks: Betting on the Future
Growth stocks are companies expanding rapidly -- reinvesting profits to get bigger, faster. You pay a premium for their potential. When it works, the results are spectacular.
Read commentary →Week 20 Day 2: Value Stocks: Buying What Others Dislike
Value stocks are companies that trade below their intrinsic worth. They are out of favor, overlooked, or temporarily struggling. The market underprices them, and patient investors profit.
Read commentary →Week 20 Day 3: The Rotation: Growth and Value Take Turns
Growth and value alternate leadership like political parties. Growth dominated 2010-2021. Value dominated 2000-2007 and bounced back in 2022. Owning both means never missing the winning side.
Read commentary →Week 20 Day 4: Dividend Stocks: The Comfort of Cash Flow
Dividend stocks pay you cash every quarter just for owning them. The Dividend Aristocrats have increased their dividends for 25+ consecutive years. There is something psychologically powerful about getting paid to wait.
Read commentary →Week 20 Day 5: SCHD: The Dividend ETF That Earned Its Cult Following
Schwab U.S. Dividend Equity ETF (SCHD) selects 100 high-quality dividend stocks using fundamental screens. Low cost, tax-efficient, and consistently competitive. It has become the favorite holding of income-focused investors.
Read commentary →Week 20 Day 6: The Total Return Fallacy: Dividends Are Not Free Money
A 3% dividend on a stock that drops 5% still means you lost 2%. Focusing only on dividend income while ignoring total return is one of the most common mistakes in investing.
Read commentary →Week 20 Day 7: Own the Whole Market and Stop Debating
Growth or value? Dividends or capital gains? Large cap or small cap? A total market index fund owns all of them. The debate ends when you buy everything.
Read commentary →Week 21 Day 1: Small Caps: Higher Risk, Historically Higher Reward
Small-cap stocks (companies worth under $2 billion) have outperformed large caps by about 2% annually since 1926. The extra return comes with extra volatility and the stomach to handle it.
Read commentary →Week 21 Day 2: Large Caps: The Compounding Machines
Large-cap companies are the survivors. They have moats, brand power, global reach, and decades of compounding behind them. Apple, Microsoft, and Berkshire Hathaway did not get big by accident.
Read commentary →Week 21 Day 3: Mid Caps: The Overlooked Sweet Spot
Mid-cap stocks (companies worth $2-10 billion) are big enough to be stable but small enough to still grow aggressively. They have historically delivered the best risk-adjusted returns of any size category.
Read commentary →Week 21 Day 4: International Stocks: The Other Half of the World
The United States is 60% of the global stock market. The other 40% includes Europe, Japan, China, India, and dozens of emerging economies. Ignoring them is a massive concentration bet.
Read commentary →Week 21 Day 5: Emerging Markets: High Growth, High Risk
China, India, Brazil, Taiwan, and South Korea are home to billions of consumers and some of the fastest-growing companies on earth. Emerging markets offer growth potential that developed markets cannot match.
Read commentary →Week 21 Day 6: The Total World Stock Market in One Fund
VT (Vanguard Total World Stock ETF) holds more than 9,000 stocks from 47 countries at market-cap weights. One fund. The entire investable world. $0.07 per $100 invested per year.
Read commentary →Week 21 Day 7: Size and Geography: Match Your Allocation to Your Timeline
Young investors can handle more small-cap and international volatility in exchange for higher expected returns. Older investors should tilt toward large-cap stability. Your timeline determines your tilt.
Read commentary →Week 22 Day 1: When Rates Go Up, Bond Prices Go Down
Interest rates and bond prices move in opposite directions. Always. This is the single most important relationship in bond investing, and 2022 proved how painful it can be.
Read commentary →Week 22 Day 2: The Yield Curve: The Market's Crystal Ball
The yield curve plots interest rates at different maturities. When it inverts -- short-term rates exceeding long-term rates -- a recession has followed within 6-18 months in nearly every instance since 1955.
Read commentary →Week 22 Day 3: TIPS: Bonds That Protect Against Inflation
Treasury Inflation-Protected Securities adjust their principal with inflation. If CPI rises 5%, your TIPS principal rises 5%. They guarantee a real (inflation-adjusted) return regardless of future inflation.
Read commentary →Week 22 Day 4: I-Bonds: The Best Deal the Government Offers
Series I Savings Bonds pay a composite rate based on a fixed rate plus inflation. They are tax-deferred, state tax-free, and backed by the U.S. government. You can buy up to $10,000/year per person.
Read commentary →Week 22 Day 5: The Fed Funds Rate: The Rate That Rules Them All
The Federal Reserve sets the federal funds rate, which influences every other interest rate in the economy. When the Fed raises rates, mortgages, car loans, credit cards, and savings accounts all respond.
Read commentary →Week 22 Day 6: Duration: Your Bond Portfolio's Risk Dial
Duration measures how sensitive your bond portfolio is to interest rate changes. A duration of 6 means a 1% rate increase causes approximately a 6% price decline. Shorter duration means less rate risk.
Read commentary →Week 22 Day 7: Fixed Income in 2024 and Beyond: Finally Worth Owning Again
After a decade of near-zero yields, bonds finally pay meaningful income again. A 4-5% yield on risk-free Treasuries is the best deal in fixed income since 2007. Do not ignore it.
Read commentary →Week 23 Day 1: What Bitcoin Actually Is
Bitcoin is a decentralized digital currency with a fixed supply of 21 million coins. No government controls it, no bank processes it, and no one can print more. It is the hardest money ever created.
Read commentary →Week 23 Day 2: Volatility: The Price of Admission
Bitcoin's annualized volatility is approximately 60-80%. The S&P 500 is about 15%. Holding Bitcoin means accepting 4-5x the price swings of stocks. Most people cannot handle this.
Read commentary →Week 23 Day 3: The Bull Case: Digital Gold for the Internet Age
Bitcoin's advocates argue it is the first truly scarce digital asset -- a store of value for the internet era, uncorrelated with traditional markets, and immune to government debasement.
Read commentary →Week 23 Day 4: The Bear Case: Speculation Without Substance
Bitcoin's critics argue it produces nothing, earns nothing, and is worth only what the next buyer will pay. It is a pure speculation dressed up as a revolution.
Read commentary →Week 23 Day 5: If You Buy Bitcoin: Rules for Not Getting Wrecked
If you decide Bitcoin deserves a small allocation, follow strict rules: never more than 5% of your portfolio, dollar cost average in, hold for 4+ year cycles, and never sell in a panic.
Read commentary →Week 23 Day 6: Altcoins and Crypto Tokens: 99% Will Go to Zero
There are over 20,000 cryptocurrencies. Bitcoin is the only one with a credible claim as a long-term store of value. The rest are speculative tokens that overwhelmingly trend toward zero.
Read commentary →Week 23 Day 7: Crypto in Your Portfolio: 0-5%, No More
If Bitcoin and crypto have a place in your portfolio, it is a small one. Your wealth is built by stocks and compounding over decades. Crypto is a satellite holding, not a core position.
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