By Philip van Doorn, MarketWatch
Ray Dalio is a billionaire fund manager. He’s an ardent capitalist but sees an imbalance that threatens the U.S., which he calls a “75-year empire” in decline.
In an interview with Jonathan Burton, Dalio lays out what he thinks U.S. business leaders and politicians should be doing to better allocate wealth and what investors should do to protect themselves.
A few big winners and a lot of pain
An index may not reflect what is really going on in the stock market. The S&P 500 Index /zigman2/quotes/210599714/realtime SPX -0.16% has returned 5.3% this year, with dividends reinvested, through Sept. 19. But the benchmark index is weighted by market capitalization, with the FAANG stocks, plus Microsoft /zigman2/quotes/207732364/composite MSFT -1.05% , making up 24% of its total value. Look at how well those tech giants have performed this year:
|Company||Ticker||Total return - 2020|
|Facebook Inc. Class A||/zigman2/quotes/205064656/composite FB||24%|
|Amazon.com Inc.||/zigman2/quotes/210331248/composite AMZN||63%|
|Apple Inc.||/zigman2/quotes/202934861/composite AAPL||51%|
|Netflix Inc.||/zigman2/quotes/202353025/composite NFLX||45%|
|Alphabet Inc. Class C||/zigman2/quotes/205453964/composite GOOG||12%|
|Alphabet Inc. Class A||/zigman2/quotes/202490156/composite GOOGL||11%|
|Microsoft Corp.||/zigman2/quotes/207732364/composite MSFT||30%|
Now consider that among the S&P 500, 55% of stocks are actually down this year, even with dividends reinvested.
This year’s tech-dominated stock market action has reflected the obvious need to expand investment in cloud technology and connectivity. But Liz Ann Sonders, the chief investment strategist at Charles Schwab, expects the investment focus to change, as she explained in an interview with Howard Gold.
Value among chip company stocks
This may surprise you — semiconductor stocks as a group trade at a low valuation to earnings estimates, compared with the S&P 500, despite the industry’s rapid growth.
Zach Dobson/courtesy Visit Bloomington
Retiring to a friendly place for cycling ... and excellent beer
Silvia Ascarelli helps a reader who plans to retire on a military pension in five years and move to a place away from heat and humidity, with low or no state income tax, that is safe for cycling and known for craft beer. Here are several possible destinations.
Don’t expect a vaccine miracle
It’s understandable to be hopeful that one or several Covid-19 vaccines will enable a return to some semblance of normal life over the next several months. But Dr. Paul Offit, a pediatrician at Children’s Hospital of Philadelphia who co-invented the rotavirus vaccine, explained why masks will still be needed even after vaccines are deployed, in an interview with Jaimy Lee.
Family, money, conflict
Quentin Fottrell — MarketWatch’s Moneyist — works through a number of sticky situations with readers this week:
An overlooked stock sector for income
The Federal Reserve made it clear this week that very low interest rates — short-term and long-term — will be with us for years. So if you are looking to generate income from your nest egg, you will need to look at a variety of options, including the utilities sector, where compelling yields are still available.
Investors — stop wasting your energy on things you cannot know
Jonathan Clements explains how keeping up with current events and financial-market expectations can actually harm your performance as an investor.
Sacrifice a little, save a lot
Richard Quinn has a variety of ideas, large and small, that can save you or someone you care about a lot of money over time, setting up a much easier retirement.
A tip to avoid being wiped out by medical costs
Howard Gold explains the cost of long-term care insurance coverage, and determines that with such high costs stacked against you as you get older, you may have no good alternative.
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