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1
What Is The Relationship Between Number Of Holdings and Returns?
2
Non-working Spouses Can Contribute to an IRA: Here’s How
3
Lose Your Health Insurance? COBRA May Help
4
The Art of the Rebalancing Bonus
5
The Market Has Been Flat For Six Months — Why This is Great News

What Is The Relationship Between Number Of Holdings and Returns?

Do mutual funds with more holdings have higher average returns?

To answer this question, I exported the turnover rate and number of holdings for all the mutual funds in the U.S. Small Cap Value Morningstar category from Morningstar’s website. There were 432 funds represented. I split the 432 funds into the following roughly-equal categories: 0-99 holdings (95), 100-199 holdings (123), 200-499 holdings (87), 500-999 holdings (48), and 1,000-6,000 holdings (79).

Here is the relationship between number of holdings and 3-year annualized returns as of 4/30/2015:

Three year returns by number of holdings   In “What Is Turnover Rate?” I wrote:
Because active fund managers are
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Non-working Spouses Can Contribute to an IRA: Here’s How

As long as there is earned income from one spouse, an IRA can be funded each year for either spouse or both up to the income amount.  So if you are still working but your spouse is not, you can fund an existing IRA for them or open a new account if they don’t already have an IRA. Earned income is generally defined as wages from a job or self-employment income from a business.

In 2015, $5,500 a year can be contributed to an IRA ($6,500 if 50 or over).  Even if just one spouse is working a second spousal …

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Lose Your Health Insurance? COBRA May Help

Former employees recently let go from their job may find themselves wondering what options they have to continue their employer provided health insurance. Generally, an employee is allowed to continue their coverage from loss of employment due to voluntary or involuntary termination, disability, reductions in hours, death, divorce, or becoming eligible for Medicare.

The length of time an individual has to remain on COBRA depends on the reason why they lost coverage from their employer. For example, if an employee is terminated either voluntarily or involuntarily he or she will have up to 18 months of coverage. In the event …

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The Art of the Rebalancing Bonus

Portfolio design and rebalancing is both a science and an art. Understanding the science is akin to understanding the physics of why a spinning ball hooks and bends. The art is the execution of the science such as when you are actually playing soccer or golf. It is the execution and follow-through that produces the desired outcome.

Knowing that rebalancing boosts returns is useless unless you as the investor have the time, discipline, and nerve to follow through and actually strike the ball.

Rebalancing is the most helpful when it is most difficult. Rebalancing involves selling the investments that have …

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The Market Has Been Flat For Six Months — Why This is Great News

Investors have experienced a very uneventful 2015. In fact, at market close on 5/7/15 the Dow Jones Industrial Average was at essentially the same value as it was on 12/5/14, up a total of just 0.72% over the six-month period. This lack of fluctuation has been even more pronounced over the last two months. As of the market close on 5/7/15, the S&P 500 has closed between 2,040 and 2,120 for 66 days in a row. Further, between 4/9/15 and market close on 5/6/15, the DOW hasn’t experienced a 1-month high OR low and has traded within a 2%… Read More

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