Reed Family Finance

What Are Your Rules? Learn From Ray Dalio

Through my evaluation of their current portfolio, I determined that they have a traditional 60/40 split between stocks and bonds. This model is very common within the brokerage world and with “do-it-yourself” investors. The theory is that when stocks go down, bonds go up, and vice versa. And by having a “balanced” portfolio an investor can minimize risk. Sounds good, right? But what happens if just about every asset class falls, and falls fast, just like they did in 2008? [...]

If I Had A Million Dollars, I'd . . .

Prudential studied Americans in their 20s and early 30s. This demographic expects to retire at age 67. According to the study, they will require about a million bucks to afford the retirement they want. But, there is a startling disconnect between the amount of money those millennials will need and the amount of money they will actually have, based on their current financial behaviors. [...]

Until Death Do Us Part... Well, Maybe Not

Many people are so desperate to get out of a bad marriage that they do not consider the toll it will take on their current financial situation and their financial future. In fact, I was recently talking to a friend whose sister just got divorced. He was telling me that his sister, who has two kids, is in a tough position. She is trying to find a decent apartment to rent, now that she cannot afford to stay in the house where they have raised their kids for the last 15 years. The worst part is that she is surprised by the situation she finds herself in. She assumed that she would be able to stay in the house. Unfortunately, this is a reality that many people face when they get divorced. That is why it is so important to understand the financial repercussions of getting a divorce in order to have a plan for financial health moving forward. [...]

How 'Modern' Is Your Portfolio?

The Modern Portfolio Theory (MPT) was created by Harry Markowitz back in 1952 and often is the “go-to” strategy for many retail advisors and do-it-yourself investors. It is an investment theory based on maximizing expected returns based on a given level of risk. MPT was designed for risk-averse investors, and Mr. Markowitz was one of the first to quantify the benefits of investing in multiple, uncorrelated stocks, rather than investing in an individual stock. He theorized that investors, who generally want [...]

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