Should You Buy The T Rowe Price Capital Appreciation Fund?

I received a reader question asking whether the T Rowe Price Capital Appreciation Fund is a good selection for those of you that don’t have self-directed 401(k) options.

Over the past year, the T Rowe Price Capital Appreciation Fund has gone up 22% while the S&P 500 has gone up 32%. I’m not sure why I’m including this statistic, because one year performance has more to do with luck rather than the evaluative skill of the manager.

Over the past three years, T Rowe Price Capital Appreciation (PRWCX) has gone up 13.16% while the S&P 500 has gone up 16.18%. Over the five year stretch, the S&P 500 is up 17.94% per year … Read the rest of this article!

This Lear Capital Commercial Is Terrible And Predatory

The most dangerous financial shift that has occurred in the United States in the past thirty years has been the shift from the pension system to one dominated by 401(k)’s.

You’re going to get bad results when you expect the average guy on the street to (1) save appropriately, and (2) select the appropriate investments so that he can build long-term wealth for decades on end.

According to CNN: http://www.money.cnn.com/2014/02/13/retirement/401k-balances/ , the average 401(k) account for someone approaching his or her 65th birthday is $165,200. Even if you reach the conclusion that people should bear the personal responsibility to prepare for their own retirements, you still have to acknowledge that the society-wide … Read the rest of this article!

2014: The Year Big Banks Returned To Trouble

Six years. That’s how long it takes financial institutions to start forgetting the scars and nightmares of the credit crisis that came out in full force in September 2008 and extended throughout much of 2009.

Wells Fargo, the strongest of the “Big Four” banks in the United States, has re-entered the market of subprime lending:

A less-than-perfect credit score is no longer an obstacle to buying a single-family home or townhouse in Southern Nevada.

Following a recent decline in demand for refinancings, Wells Fargo &Co., the nation’s largest mortgage lender, is easing some mortgage loan qualifications to boost lending.

Wells Fargo will drop its minimum credit score for loans backed by the

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Six Investing Principles From Warren Buffett’s 2013 Shareholder Letter

You don’t need to be an expert in order to achieve satisfactory investment returns. But if you aren’t, you must recognize your limitations and follow a course certain to work reasonably well. Keep things simple and don’t swing for the fences. When promised quick profits, respond with a quick “no.”

Focus on the future productivity of the asset you are considering. If you don’t feel comfortable making a rough estimate of the asset’s future earnings, just forget it and move on. No one has the ability to evaluate every investment possibility. But omniscience isn’t necessary; you only need to understand the actions you undertake.

If you instead focus on the prospective price change

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IBM Stock: All Those Cash Dividends

Between 1978 and 2012, IBM stock delivered returns of at least 12% during every ten-year or greater time frame except for the 1998-2008 and 1999-2009 measuring periods. Up until the past decade or so, it was “the” tech stock. It was the company in the tech industry that survived every change and found itself in the taxable accounts, retirement accounts, trust funds, and charitable accounts of even the most conservative of equity investors. “Big Blue” had survived a century, putting a together a track record of 14.5% annual returns from 1945 until 2012. We are talking about real multi-generational wealth here.

As those same investors know, IBM has been struggling competitively since 2012, … Read the rest of this article!