Showing posts from September, 2015

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Clearly, Not Everyone Is Getting Rich Off The Stock Market

Well, the NY Fed was out today with its Quarterly Report on Household Debt and Credit for Q4 2017. Clearly, Americans are in a lot of debt. Take a look.

Just a couple of quick hits from the report. Total U.S. household debt rose $193 billion in the 4th quarter, to a new all-time peak of $13.15 trillion. That's 17.9% above the most recent trough in Q2 2013. Broken down by segment, what do you suppose was the largest gain in percentage terms? Credit cards, with a 3.2% increase. In the picture above, the widening gap represented by the red arrows reflects the fact that non-housing debt is rising at a faster pace than housing debt.

Here's what's troubling about that. Below is a picture of the stock market, as represented by the S&P 500 index, over that same period; from the most recent credit trough in Q2 2013 to the end of 2017.

And thus, the title of this article. Over that period, the S&P 500 index rose by 75%; from roughly 1,600 to 2,800. Apparently, however, the r…

On Substituting Dividend-Paying Stocks For Bonds In The Current Environment

Today's article is going to come from a very interesting place for ETF Monkey.

Readers who have followed my work will by now be familiar with its main focus, namely using ETFs to build low-cost, extremely diversified portfolios. An example of this is the ETF Monkey Vanguard Core Portfolio; based on just three ETFs yet offering well-balanced exposure to both domestic and foreign stocks as well as bonds. In the article linked above, I advocated establishing target weightings and sticking to these. I wish to reiterate that, for many investors, I would recommend sticking to that game plan.

ETFs form the core of my portfolio, comprising 81.11% of my total portfolio as of this writing, and I am very conscious of maintaining and rebalancing to target weights.

However, I occasionally make an exception and maintain modest positions in individual stocks for specific reasons. As of this writing, two such positions are AT&T Inc. and Verizon Communications, each of which holds a weighting …