Prespectives

Proj Omni | Yesterday
Vanguard Total Stock Market Index Fund (VTSMX) is one of the top performing mutual funds tracking US large cap stocks.  In the following review, we discuss some of the key aspects of VTSMX fund performance (share—not stock—price, expense ratio, dividends, holdings, and tax efficiency), along with other options individual investors should consider (VTSMX vs. VTSAX, VTSMX vs. VFINX, VTSMX vs. VTI).How do we rate VTSMX Fund? If you’re looking for a VTSMX star rating, check out Morningstar.  What we provide to you are some pointers that will enable you to make informed decisions based on your investment needs, experience, and understanding of the market.   If you are new to the world of investme... more
Proj Omni | May 15, '17
Vanguard 500 Index Fund (MUTF:VFINX) is one of the best S&P 500 index mutual funds available.  In this review, we’ll take a look at the fund performance (share—not stock—historical price, risk, dividend, expense ratio and tax efficiency), and the alternatives (VFINX vs. VOO, VFINX vs. VTSMX, VFINX vs. VFIAX Admiral shares) available to individual investors.    How do we rate VFINX?  We don’t assign star ratings, such as Morningstar, but rather guide individual investors to make a decision based on their investment goals, experience and knowledge of the market. If you’re a novice in investing, and you’re looking for a broad exposure to the US market, you should give this fund a shot.  We give... more
Proj Omni | Apr 16, '17
We’ve recently came across a blog post from Wealthfront’s CEO Andy Rachleff where he explains why the company chose Vanguard’s over Blackrock’s ETFs for their portfolios.  From our perspective, Wealthfront is a solid robo-advisor, but the decision struck as unbalanced.  The main argument Mr. Rachleff presented is that Vanguard has more cost efficient ETFs, and a history of cutting expenses vs. the main rival iShares/Blackrock.  Hence Wealthfront partnered with Vanguard for all ETFs (where Vanguard has a competitive offering).  While Vanguard may have a cost advantage across different ETFs, we believe that buying ETFs solely based on cost is short-sighted.  In some ways, it feels a lot like b... more
Proj Omni | Apr 12, '17
Here is why we launched Finstead Mutual Funds: for a while, if you’ve tried getting synthesized information on funds, such as performance, cost, risk and expenses that you can interpret easily, it would’ve taken you ages to get the insight you need to make your investment decisions.  But it doesn’t have to be that way.  Imagine you can find all data in one place, and you can further compare the data points to industry benchmarks.  Here is an example.  Fidelity Magellan Fund (FMAGX) is one of the most popular mutual funds—and historically it received very good ratings.  Now you can compare what the fund returns vs. indexed funds (e.g., S&P 500 mutual funds such as VFINX), and you can also che... more
Proj Omni | Mar 20, '17
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Proj Omni | Mar 01, '17
In the previous post, we’ve covered what you can expect from the Social Security program, depending on your age.  Most of the younger investors we’ve spoken with inevitably concluded that they should be saving money via 401k-plan pre-tax deductions, where available through their employers.  But we’ve gotten a number of questions about aftertax 401k contributions, which generally make sense for a small subset of the population.   The reason for the uptick in interest is because the option to make this type of contribution has been added to more and more plans following a change in IRS regulations in 2015. To figure out whether an aftertax 401k makes sense, we need to know whether you’re maxin... more
Proj Omni | Feb 22, '17
You might have been told to be aggressive in your savings as much as possible, because your full social security benefit may not be there when you retire. But what does that mean for you? If you’re an older investor, there is a decent chance you will get your full benefits.  But if you’re an investor in your 30s or 40s, how do you factor social security benefits into your retirement plans?  Should you assume there will be only a reduced benefit when you get to your golden years? First, we’ll tell you how to get your estimated monthly social security benefit amount. Create an account at www.ssa.gov where you can see your estimated monthly benefit, which is based on your actual earnings histor... more
Proj Omni | Feb 07, '17
Finstead today gives you an insight into stock investing—if that’s the direction you choose to pursue.  But many retail investors are focused on maximizing their earnings and optimizing their overall portfolios, while minimizing costs.  We’ve been searching for insightful blogs that help you in this endeavor, and so in this post, we’ll share with you some helpful resources where you can find good personal finance advice. Among the many blogs we researched, the majority focus on cost optimization, but a number do provide comprehensive advice about the market, portfolios, your earnings potential, and selecting good (investment) products.   So here is our choice of blogs that provide a more hol... more
Proj Omni | Jan 30, '17
It’s never too early to start investing. In fact, when you start it at a younger age, you develop some good habits that could help you do well in the long run.  So what do you need to know about investing to get started at the age of 16?Learn investment basics At this age, a great thing to do is to learn fundamental investment skills. Take time to read personal finance blogs, and check out Quora and Reddit investment sections.  Get a copy of “Investing for Dummies” to get a scoop on investment planning.The concepts that young investors often overlook are diversification and compounding.  Diversifying simply means that you should hold a variety of investments that don’t move in tandem in diff... more
Proj Omni | Jan 26, '17
Lately, we have been receiving many questions regarding micro-investment services like Acorns and Stash Investing. These investment services emphasize the idea that there is an easy way to start investing—and that’s probably true.However, the ability to save money (and cut expenses) is a skill that most successful investors exhibited at the point in time when they started investing. Learning how to save money instills a discipline that you will need as an investor.  Truthfully, you’ll need to have a lot more than just expense optimization skills to be a good investor… for example, a good stomach!   Principally, Stash and Acorns could potentially help brand new investors get started on the in... more
Proj Omni | Jan 18, '17
If investing in stocks is your ‘thing’, at times you may feel tempted to seek advice from self-declared ‘experts’ and people who know more about stocks than you do.  One idea that comes to mind is to consult a stock broker—a person who recommends and trades stocks for living, and has dedicated bandwidth to help clients like yourself.  If that’s an idea you’re entertaining, hit a pause button.  Read the below perspectives on why you should NOT pay for stock advice.Your and your stock broker’s incentives are fundamentally misaligned.  Paying an advisor for stock picks is like funding someone to play poker for you, but you bear the consequences.  You pay the broker per round of poker played, no... more
Proj Omni | Jan 11, '17
In the previous post we discussed whether you, as a retail investor, should even consider investing in IPOs.  You carry a great deal of risk when you invest in mature stocks, but new offerings can be even riskier.  If you’re a daredevil and you’d like to buy a newly IPOed stock, here are a few things you should know before making a decision:1.  Newly issued stocks can rise and fall insanely fast.  This is particularly pronounced for those stocks that show an exceptional earnings and sales growth, or have steep growth projections.  The demand for the stock driven by hedge and mutual fund managers, along with other large institutional investors, can drive the stock price up to irrational valua... more
Proj Omni | Jan 04, '17
One question we often get from retail investors is, what should I think about to figure out whether to invest in an IPO? First, do the due diligence for IPOs as you’d normally do for other investments.  You'll need to understand the business fundamentals: what the company does, the product, the business model, customer segments and sales (both current revenue and sales projections).  Then you'll need to understand how richly is the company valued--what is the share price and how do the valuation ratios (e.g., Price/Sales, PEG) compare to those of other companies in the industry.  All of this may be a tad more difficult to find for privately held companies that haven’t IPOed yet.     Second, ... more
Proj Omni | Jan 02, '17
It always surprises us how many people don’t do their homework before plunking down their hard-earned cash on individual stocks.  From our perspective, there are some questions you should be able to answer prior to making an investment into a company:1. What does the company do?  It’s a simple question, but that doesn't mean it's easy.  To answer the question, there are a plenty of places to look, including the company's web site.  Also, check out the 10-K report to better understand the business fundamentals and Finstead News to learn about the company’s recent developments.  2. Is the company profitable?One way to do figure this out is to read the quarterly and annual earnings reports (suc... more
Proj Omni | Dec 31, '16
Happy 2017!  We wish you to become healthier and wealthier this year. To prosper in 2017, you may want to be extra careful about speculative stock advice you’re constantly bombarded with, even from reputable media sources.  See the snapshot from Google News below--so many stocks to buy in 2017? We don’t necessarily think so.  Here is an example--CNN Money lists Broadcom (AVGO) is one of the top stocks to invest in 2017, fueled by a recommendation from Ross Seymore from Deutsche Bank.  We took a broader look at Broadcom, and realized that it gained quite a bit of value in 2016: 25%, which is roughly 15 percentage points above the S&P 500 return.  Since the stock overperformed the market, you’... more
Proj Omni | Dec 29, '16
Investing in stocks is a risky value proposition, no doubt.  For a while, we’ve been trying to help retail investors come up with better investment decisions--and we started with stocks as the first security category we’re going to cover.  Why stocks?  It turns out that, despite what finance professors will tell you about the risks of investing in individual stocks, 30% of Americans consider stocks good investment opportunities and continue to actively trade them.  Let’s rewind the movie a year ago, when we first launched Finstead.  At that time, we wanted to tell retail investors about equity analysts’ and bloggers’ track records, so they can figure out whose stock recommendations to follow... more