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That “Big Beautiful Bill” (which I dislike the name – I’m not a fan of big bills, and the name is indicative of Trump’s limited vocabulary) that was passed earlier this year means that the overtime my wife earns isn’t going to be taxed this year. But – being the paperwork nerd I am – I wanted to know how I’m going to claim that deduction. It’s simple – really: I’ll enter her W-2 tips […]
Today, more than at any other time in my career, I encounter investors with huge, life-changing returns in single stock positions. This comes as no surprise to anyone who has been paying attention to the US stock market over the past 15 years. Stock market returns are trending well above long-term averages. Further, the concentration of outsized returns among a small, well-known group of stocks is mind-blowing. I have characterized the post-GFC US stock market as the easiest DIY market of all time. This summer, as a client walked me through positions in a self-directed trading account, I commented, “Yes, there is no denying that the stocks you hear about on financial television are the ones that have beaten the market in recent years.” This has been an era in which amateurs have been able to beat professionals. Perhaps the ubiquitousness of information and data has forever changed the dynamics of investing. Which brings me to the question in the title of this post. How does one sell an astronomical winner? Rather than providing a black-and-white answer, I have developed a framework, albeit an imperfect one, for approaching this decision. With the 20/20 benefit of hindsight, we can always lament what ‘could have been’ had we YOLO’d our winners into the stratosphere. Selling winners relies more on emotion than on data and analysis. There are three paths forward. Never Sell – YOLOIf I had bought $10,000 of Apple Inc. stock in 2003, when I graduated from college and never sold a single share, that investment would be worth $5.6 million today. Gulp! (I actually had $15,000 left in my college savings account at the time. Too bad I spent it on a move to New York City.) But many investors have held onto Apple stock during this time period. Returns of $10,000 invested in APPL October 13, 2003 – October 13, 2025In most of these real-life cases, Apple makes up a large percentage of the investor’s portfolio. Never selling has been a winning strategy so far. One option, therefore, is never to sell. Avoiding the decision completely ensures two things: 1. The investor will not miss a cent of potential future returns from Apple, and2. The performance of a single stock will forever dominate the portfolio. I am personally uncomfortable with betting my financial future on one company, even a great one like Apple. But for some, the mental fortitude of jumping off the winning ride is too great. To them I ask, then what are these life-changing investment returns for? Is it all just a game, a thrill-seeking ride to watch numbers go up on a screen? If that is the goal, by all means, keep playing. But don’t be surprised when the future doesn’t perfectly match the past. Rip the Band-AidA second extreme option is to rip off the proverbial band-aid and sell every share at once. You remember the anxiety-inducing exercise of removing sticky band-aids from your scabs as a child. Removing them slowly is both mentally
Get a $100 bonus thanks to ING with the code CNW116 simply by opening a new everyday account and following these steps until 30 Nov 2025 The post Get $100 for New ING Customers appeared first on The Thrifty Issue.
Pools are crazy expensive to build and sometimes don’t generate good long-term investments, especially when it comes to selling your home. However, the joy of owning a pool can still be enough to want to install one – so here are some ideas to make it a better investment than you might first think. Make … The post How To Make A Pool A More Worthwhile Investment appeared first on The Thrifty Issue.
When I first started to take initiative and improve my finances, the first step was to build a solid savings base. I knew that by having a large pile of savings, I would cover myself if emergencies happened. And having this savings would also allow me to focus on investing my money and growing it faster. Thanks to my finance background, I understood the power of compound interest and wanted to find a savings account […]
The Mind Over Money Matters – How to Visit Cyprus Smarter guide. Discover Cyprus with confidence using our tips and reviews for Cyprus. From insider travel advice and honest hotel reviews to local food, culture, and attractions, we help you plan a smarter, more memorable trip. Our Cyprus This page is all about our Cyprus, helping you make the most out of your stay on this beautiful Island that has over 300 days of sunshine […]
Introduction Dividend-growth investing rewards patience: you want companies that not only pay income today but reliably increase that income year after year. When you screen for long-term winners, four metrics matter most: dividend yield (what you earn today), dividend history (how reliably and how long dividends have been paid and increased), payout ratio (how much of earnings is distributed), and free cash flow (the cash available to fund dividends after the business pays for capital […]
“The market can stay irrational longer than you can stay solvent,” by John Maynard Keynes By most popular valuation metrics the stock market is overvalued. According to “The Buffett Indicator,” which divides the total US stock market value ($65.47T) by the gross domestic product ($30.15T), the US stock markets valuation in June, 2025 was 217% or roughly 68.63% above the historical average. In this article, we’ll explore what “overvalued” means, examine key valuation metrics and share smart strategies for investing in today’s richly priced market. What Does an Overvalued Stock Market Mean? Shiller P/E Ratio (CAPE) One of the most respected valuation tools, the Shiller or CAPE (Cyclically Adjusted Price-to-Earnings) ratio, compares today’s S&P 500 price to the average inflation-adjusted earnings over the past 10 years. This method smooths out earnings volatility and adjusts for inflation. October 2025 Shiller P/E Ratio: 39.00 Historical Average: 17.29 Implied Overvaluation: ~126% [embed]https://youtube.com/watch?v=t5zV19N_O6k&si=ZwoudgjTFNYXU9Ep[/embed] S&P 500 Price-to-Sales Ratio This metric divides the S&P 500’s market price by its trailing 12-month sales (as of March 2025): Current Ratio: 3.31 Historical Average: 1.80 Implied Overvaluation: ~84% Buffett Indicator As mentioned earlier, the Buffett Indicator currently sits at 217%, suggesting the market is strongly overvalued. Taken together, these metrics suggest the market is overvalued by 69% to 126%, depending on the measure. Is the Stock Market in a Bubble Now? Historically, the only time the Shiller P/E ratio exceeded today’s level was in October 1999, when it hit 44.19. That peak preceded the dot-com crash, during which the S&P 500 fell from $1,465 in December 1999 to $735 in February 2009. Does this mean a stock market crash is coming? Not necessarily. Markets tend to revert to their mean valuations, but timing corrections is notoriously difficult. S&P Value from 1985 – 2025 Source: yahoo!finance For those of you who don’t remember, at it’s peak valuation the S&P 500 was priced at $1,465 in December 1999. During the ensuing decade, as the dot com boom ended and the tech bubble burst, the stock market fell to $735 in February 2009. Does that mean that a stock market crash is coming? Not necessarily. The stock market typically reverts to its mean valuation, eventually. But the timing of the next stock market decline is unknown. Maybe the Stock Market Isn’t in a Bubble Some analysts argue that AI-driven productivity could justify higher valuations. If corporate earnings grow faster than asset prices, valuations could normalize without a crash. Others believe that today’s market leaders are profitable and established, unlike the speculative tech firms of the late 1990s. At the close of the last millennium, many companies with minimal earnings were richly valued. Where to Invest in an Overvalued Market? In the “S&P Value from 1985 – 2025” chart above, stock market prices have peaks and valleys, yet the long term trend remains upward. Those that sell during downturns typically get burned. That’s because you need to be correct twice, first, when to
It’s commonly said that you can afford anything but you can’t afford everything. That might not be entirely true. There are certainly some things that I (and probably you) couldn’t buy even if we used every dollar we had. But the sentiment is so true. We all make choices daily about what to spend our money on. We can choose the things that are important to us and then spend our funds on things. Unfortunately, […]
Wondering if the Costco Executive Membership is worth it in Canada? See the break-even math, real-life examples, and how to get your money back. The post Is the Costco Executive Membership Worth It in Canada? (2025 Math Breakdown) appeared first on Genymoney.ca.
Over the past few months I’ve attended a few author dinners in NYC. This is where a group of authors/prospective authors get together and discuss whatever is concerning them. There might be a debate around the future of writing and the impact of AI. We might argue about traditional publishing versus self-publishing. And so forth. Almost all of the authors/prospective authors aren’t in the personal finance space, and they tend to be older and far more successful than I am. I don’t say this to downplay anything I’ve done, but to emphasize that there’s a difference between selling thousands of books and selling millions. The thing that really surprises me though is how they think about money. At some point during the conversation, the discussion inevitably turns to personal finance. And when it does, it’s always an eye-opener. For example, one online creator complained about the price of beer at their local brewery. It was $15 after tax and tip. I get it. A beer should feel cheaper than $15, even at a craft brewery. But this complaint is coming from someone who posts about the millions they’ve made online. While I don’t know their exact financial situation, based on their public earnings alone they are either deep in Level 4 ($1M-$10M) or low Level 5 ($10M-$100M) in their early 40s. This would put them in the top 1% of U.S. households for their age, yet they are complaining about paying $5 extra for a beer. Their cognitive dissonance is one of the most fascinating things in the world to me. How can you be so wealthy and care about something so insignificant to your finances? You’re complaining about the beer, yet you can buy the brewery. You might argue that such complaints are just performative or are used as a way to connect, but I don’t think that’s the case. Such spending gripes typically occur unprompted and are always about individual expenses, not the price level in general or how these prices could impact others. But spending issues are just the tip of the iceberg. I also get a sense of financial insecurity from some of these people who should have nothing to worry about. People in Level 5 ($10M-$100M) who are concerned about the success of their next project. People in the 1% who still seem dissatisfied. And if they are dissatisfied, then how should I feel? It reminds me of that Chris Rock joke: If Bill Gates woke up with Oprah’s money, he’d jump out the window. Would you be content as Oprah in this scenario? I would. However, some people wouldn’t. The core issue is that wealth is almost always judged on a relative basis, even when it shouldn’t be. Alain de Botton summarized this beautifully in Status Anxiety: Wealth is not an absolute. It is relative to desire. Every time we yearn for something we cannot afford, we grow poorer, whatever our resources. And every time we feel satisfied with what we have, we can
How to budget for Christmas Christmas is a time when it can be tempting to overspend and potentially get into debt. However, by budgeting appropriately and strategically you can manage expectations for friends, family and yourself. Managing your money well can also help to reduce stress for you and for others. And that’s before you even look at ways to save money! Once you start spending money on Christmas, it can be easy to get […]
Welcome back to another monthly update from Root of Good! After a two week cruise exploring the Baltic Capitals in Europe, we’ll have almost a whole month in Raleigh before our next big trip. During September, we spent the first couple of weeks prepping for our cruise. It took a lot of time to research the eight different cities we visited around the Baltic sea. We visited Oslo in Norway, Aarhus and Copenhagen in Denmark, […]