The term Animal Spirits seems to have replaced The New Normal as the description of choice for economic commentators.     The new normal describes an indefinite state of slow economic growth, while animal spirits represents a more positive outlook that is underpinning the surge in stock prices since the November election.    While intriguing language, neither term helps much with understanding or navigating the financial markets.&…

Are you a true believer? If you are not, it’s okay. Most people who invest in index funds do not fully understand them. You can still be a successful investor, but it would be even better if you were a true believer. The word is getting out. Money is flowing from active mutual funds to passive index funds at an astounding rate. It’s no coincidence that Vanguard, the pioneer of index funds, has taken over the top spot as the largest fund company. Its S&P 500 in…

With the recent Bipartisan Budget Act of 2015, Congress has closed the door on two social security claiming strategies that it considered “loopholes.”    The File-and-Suspend strategy allowed a person to delay his or her own benefit in order to get a higher amount later while still allowing a spouse to claim spousal benefits based on the worker’s earnings record.  The Restricted Application technique allowed a person to colle…

Last week, the Department of Labor (DOL) issued a rule change that imposes higher standards on brokers and other commission-based investment advisors in an attempt to reduce conflicts of interest.   The DOL, which overseas retirement accounts such as 401(k) plans and IRAs, issued the new regulations after six years of debate.  These regulations impose fiduciary responsibility on anyone giving advice regarding retirement accounts and are sup…

When my younger son Kevin was just a little guy (he’s sixteen and six-feet tall now), he absolutely loved stuffed animals.  More specifically, he loved stuffed dogs.  He had dozens of them, which we called his “buddies.”  On special occasions such as birthdays, the family would visit the Build-A-Bear Workshop store at the local mall to shop for a new buddy.   The Build-A-Bear store allows children to follow an assembly line and create their…