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Finance, like many professions stocked with men trying to impress each other, has accumulated a plethora of cliches like barnacles on the hull of a ship. Among the hoariest is the admonition, "don't buy the dividend." Since I, personally, love dividend-paying stocks, not because of their "outperformance" or their "value" but simply because they pay dividends, I decided to … [Read more...] about No, you still shouldn’t buy the dividend

While it's a cliche to say that investors have short memories, I'm frequently surprised to realize just how short most people's memories are: I'm old enough to remember when the United States was running a budget surplus and the chairman of the Federal Reserve endorsed a tax cut because of the risk of the debt falling too low. I'm old enough to … [Read more...] about What would you do if the risk-free rate was 7%?

A spectre is haunting the United States — the spectre of pension crises. Since "the pension crisis" is on the lips of policy-makers around the country, I think it is well worthwhile taking a moment to discuss what is, what might be, and what is not a pension crisis. For additional details I recommend this recent Haas Institute paper on public … [Read more...] about What is, or might be, a pension crisis?

On Twitter the other day I had a short exchange with Noah at Money Metagame about a question that I find fascinating: what do you do with your next dollar in income? Budgets are fine but don't aid ongoing decision-making For a little bit of context, here are my recurring monthly expenses: Rent Phone Internet Blog subscription service Google … [Read more...] about Where does your marginal dollar go?

I've written before (and expect to write more) about the Social Security Administration, which is both the primary source of disability insurance for low-income workers and one of the lowest-cost guaranteed retirement savings vehicles available to all workers in the United States. I want to address a few curious issues that arise with late-career Social Security … [Read more...] about The effects of late-career Social Security contributions