Letter to My Daughters: On Financial Health and Wellness
Financial Health and Wellness have a LOT in common with Physical Health and Wellness; especially in the sense that everyone knows it’s important, and they even know how to do it (make more, spend less, invest the difference), but very few people actually do what it takes to achieve it. John Templeton once told a reporter his secret for becoming wealthy: for the first 20 years out of college, he saved half of everything he earned. Period. Now, John Templeton is a LEGENDARY investor and has earned good returns for his clients by investing. But his SECRET to wealth was [...]
WEALTH vs. INCOME: They are not the same thing.
Income is the money you earn. It can come from your job, a business, rental property, or even investments. It’s what comes in each week, month, or year — like your paycheck or dividends. Wealth is what you own. It’s the value of your assets — your home, savings, retirement accounts, investments, and any other things of value — minus what you owe (your debts). Why They’re Not the Same A family can have a high income and still not have wealth, especially if that family spends everything they earn or carries a lot of debt. On the flip side, [...]
Thoughts On: Uses of Cash in the Portfolio
Should we go to cash? Why cash? Periodically, clients ask if we should “go to cash” with their portfolios. They never ask this question while stock prices are going up, but only when prices have been coming down. This is due to the human tendency to buy at the top and sell at the bottom, which is a bad tendency. To combat this tendency, I want to look closer at the role of cash in an investment portfolio. An investment portfolio has at least a five-year time horizon; it is NOT short-term spending money. Short-term spending money belongs in cash [...]
So Far the 2020’s Don’t Look Like the 2010’s
Portfolio Manager Jeff Muhlenkamp reviews the impact of national and international policies, the state of the US economy, the global economy, and changes in the political environment on investment opportunities. Watch the April 3, 2025, Investment Seminar recording. The opinions expressed are those of Muhlenkamp & Co. and are not intended to be a forecast of future events, a guarantee of future results, nor investment advice.
Is It Time To Play It Safe?
In a recent Bloomberg article, our portfolio manager, Jeff Muhlenkamp, summed up the current state of financial markets saying, “You’re going from an environment where everybody was certain to an environment where nobody is certain, and in and of itself that will impact the market.” As we’ve always maintained, financial markets hate uncertainty. Investors worldwide have recently shifted to a “risk-off” mindset—meaning they’re prioritizing safety over chasing big gains. This is foundational thinking at Muhlenkamp. Think of it like swapping an aggressive rollercoaster ride for a sturdy umbrella in a storm. Over the past few weeks, many have sold the [...]
Thoughts On: Managing your Portfolio in Uncertain Times
I’ve been paying attention to the stock market for over 30 years, and I can’t remember any times that weren’t uncertain. I checked with Ron, who has been paying attention since 1968, and he can’t remember any times of certainty either. When I think about managing your investment portfolio in uncertain times, I start with these questions: What is uncertain today? What has been uncertain in the past? Were these unprecedented at the time? How did you manage your portfolio then? What did you learn from that? For example, the 1970’s were unprecedented in having high inflation combined with high [...]
Letter to My Daughters: On Investment Risk
Most conversations about investing start with the question, “How much risk can you handle?” which I think is a very good question. But few people take the time to define the term “risk,” and so they wind up making assumptions that may or may not be true. There are all kinds of risks in life, and there are different risks associated with investing money, but I’m going to focus on just three of them: The chances of losing my money, How much and how often the price of a security goes up and down, The probability of losing purchasing power [...]
Five Tax-Smart Investing Strategies for 2025
Tax-smart investing is a dynamic and ongoing process. You can keep more of your hard-earned money by leveraging tax-advantaged accounts, prioritizing tax-efficient investments, and staying proactive about ever-changing tax laws. As 2025 unfolds, make it the year you take your tax strategy to the next level—because it’s not just about what you earn; it’s about what you keep after tax. Here are five strategies that help to maximize what you keep when it’s time to pay Uncle Sam. 1. Maximize Tax-Advantaged Accounts Tax-advantaged accounts remain a cornerstone of intelligent investing. These include: 401(k)s, IRAs, and Roth IRAs: Contribute the maximum [...]
Thoughts On: The 6 Ps of Financial Happiness
We all know that the job of a money manager is to make people money. As difficult as that can be, the job of the client service manager is even harder. Client service has to make people happy. You might think that if you make people money, then they will be happy; but, I have learned you have to make people happy first so they can stick around long enough for you to make them money. It is a classic “which comes first, the chicken or the egg” dilemma. If I don’t make them happy, then I can’t make them [...]
Looking Toward 2025
Here’s a quick update on what we’re paying attention to as we come to the end of 2024: Markets Stocks: The market overall is expensive on almost all common metrics: market cap to GDP, price to sales, etc. We are very wary of the most popular, most expensive stocks that have done so well lately. A handful of VERY pricey tech stocks are driving the DOW, S&P500, and NASDAQ, Bond: The bond bull market ended in 2020 after almost 40 years. Long rates have risen for almost 4 years now, and bond prices have been DOWN for 4 years in [...]