The 2 Most Important Charts for the Week Ahead

Want to know what could send stocks soaring or tumbling this week? These two charts are a good place to start.

Apr 27, 2014 at 3:00PM


What will influence the direction of stocks this week -- and particularly that of the S&P 500 (SNPINDEX:^GSPC)? While that's a difficult if not impossible question to answer, one would be excused for concluding that it'll largely be dependent on two important reports due out on Monday and Friday, respectively.

The first concerns pending home sales, an estimate of the volume of purchasing contracts signed but not closed in any given month. When the National Association of Realtors last released the figures, the results were abominable. Its pending home sales index dropped by 0.8% in February compared to the previous month and by 10.5% relative to the same month last year.

To make matters worse, the disappointing figure is just one of many that have analysts and investors worried about the state of the housing recovery. Last week, for instance, we learned that both new and existing home sales plummeted in March. On a year-over-year basis, the former dropped by 13.3% and the letter fell 7.5%.

As a leading indicator of these trends, in turn, investors would be smart to closing watch Monday's release of the National Association of Realtors' pending home sales index.

The second report is the monthly jobs report, scheduled to be released by the government on Friday. The good news on the labor front is that the unemployment rate has dropped considerably. In March, it was estimated at 6.7%, or well below the 10% peak from four years ago.

However, the bad news is that this figure is becoming an increasingly unreliable reflection of the labor market's health. As Federal Reserve Chairwoman Janet Yellen recently discussed, the share of the workforce that's working part time but would prefer to work full time remains quite high by historical standards, the ranks of the long-term unemployed continues to be elevated, and the labor force participation rate is uniquely low.

With these things in mind, the big question is whether we'll see movement in the right direction on Friday. If things continue to improve, albeit even gradually, stocks are likely to respond in kind. If they don't, investors should prepare to feel the pain in their portfolios. Either way, for the long-term investor, these are but tiny blips on the radar that shouldn't influence your capital allocation decisions either way.

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A Financial Plan on an Index Card

Keeping it simple.

Aug 7, 2015 at 11:26AM

Two years ago, University of Chicago professor Harold Pollack wrote his entire financial plan on an index card.

It blew up. People loved the idea. Financial advice is often intentionally complicated. Obscurity lets advisors charge higher fees. But the most important parts are painfully simple. Here's how Pollack put it:

The card came out of chat I had regarding what I view as the financial industry's basic dilemma: The best investment advice fits on an index card. A commenter asked for the actual index card. Although I was originally speaking in metaphor, I grabbed a pen and one of my daughter's note cards, scribbled this out in maybe three minutes, snapped a picture with my iPhone, and the rest was history.

More advisors and investors caught onto the idea and started writing their own financial plans on a single index card.

I love the exercise, because it makes you think about what's important and forces you to be succinct.

So, here's my index-card financial plan:


Everything else is details. 

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