John H. Robinson

Co-Founder at Nest Egg Guru and 1 other company
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    "Although published academic research overwhelmingly supports passive management and finds that trading frequency is inversely correlated with performance, there are indeed instances where at least some degree of intervention may be warranted," says John H. Robinson, founder of Financial Planning Hawaii in Honolulu."

    "Passive bond index fund investors may be unpleasantly surprised that the "conservative" portion of the portfolio might produce low returns or even losses, instead of providing the expected stabilizing effect traditionally associated with bonds. To counteract potential losses, Robinson encourages clients to replace medium- and long-term bond funds with short- to intermediate-term bond funds, laddered portfolios of individual bonds, or CDs."

    Read Article at U.S. News & World Report:


    Meanwhile, when a dividend drops even in the slightest, to quote Buffett's Roman Empire doppelganger, consider it caveat investor: Let the shareholder beware.

    "When a company cuts its dividend it is often a sign that the company is unhealthy, which may cause the stock price to drop," says John H. Robinson, owner of Financial Planning Hawaii in Honolulu. Additionally, some mutual funds are bound by prospectus to only invest in dividend-paying companies," Robinson adds. "So when a dividend is eliminated the price may take a hit as the shares are sold from these fund portfolios."

    Robinson – a self-described disciple of random walk theory and efficient market hypothesis – advises clients, "We do not invest in individual stocks for the purpose of outperforming the broader stock market. Instead, the rising dividend stocks we purchase fill a unique objective: providing an income stream that rises at a rate that is consistently higher than inflation over time." He adds: "Hopefully, we get some capital appreciation over time, too. If we happen to outperform the broader large cap markets in some years, it is pure luck."

    Read More at U.S. News & World Report:

    "While the superiority of passively managed index funds over active fund management is well-established, a question that rarely arises in personal finance discourse is, “Does this mean index funds (and/or ETFs) are really the only investments American consumers need?”"

    "While the rise of index fund investing undoubtedly benefits investors, developing a sound, tax-efficient retirement portfolio may require the inclusion of individual securities and careful planning across multiple types of accounts."

    Read more: There Is More to Investing Than Index Funds
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