The Rational Investors

What is the Rational Investors?

The Rational Investors is a community focused on assisting one another make pragmatic wealth building decisions. Traditional financial education disseminates mainly from financial institutions, thus emphasizing what they want you to know including the strengths of their particular products and the weaknesses of others. We are here to help each other find honest, independent and straightforward financial insight.

Latest Articles

It May Not Be A Ponzi Scheme, But... by The Logic Group

Recently many media outlets have focused on ponzi schemes poignantly highlighting the ease of taking money from investors and falsifying the returns. Bernard Madoff's admission that he was running what could amount to as a $50 billion ponzi scheme rocked not only his investors, but all investors. Ponzi schemes unfortunately happen frequently, however the sheer size of this most recent event is hard to fathom, especially considering the sophistication of those taken by Madoff’s scheme. Although the devastation was massive, it pales in comparison to the scheme our government has orchestrated.

How to Own Gold and Silver by The Logic Group

Just as you should diversify the various asset classes that you hold, it is also a good idea to diversify how you invest in those asset classes. This is especially true with precious metals. There are many ways to invest in precious metals and many of them are good, but they are beneficial for different reasons.

Life Insurance by The Logic Group

Life insurance, strangely enough, is one of those topics that can lead to passionate disagreement (despite it's basic premise). There are many different theories on what type of life insurance people should choose and how much of it they should have. There is no right answer to these questions (as each person's situation and goals are different), but here is our take on the subject.

Diversification by The Logic Group

Your ability to lower the risk you are taking with your assets begins with diversification. The old adage about having your all eggs in one basket becomes even more true when it is your nest egg.

Inflation by The Logic Group

Many people believe that inflation is headed our way soon. The question is how best to prepare for it. Inflation is a government-created problem that every government thinks it can control. However, it has meant the end for several governments world-wide over the past two centuries. As we try to build wealth for ourselves that we can rely on for our future benefit, we must keep in mind that saving up a slew of greenbacks may not work out as well over time as we may have planned if significant inflation were to occur in the near future.

Why You Need Gold in Your Portfolio by The Logic Group

As we work and build wealth we seek ways to store that wealth. As recently as the early 1930's that wealth could have been stored safely in U.S. dollars, as the currency itself was insured. It was backed by gold and silver. However, over the course of the 20th century the dollar lost all of its ties to gold and silver. Now the U.S. dollar is backed only by the trust that people place in its value, it is yet another fiat currency. If you want to store wealth for the long term, you need to convert some of your accumulated dollars into real money, not just currency. Accordingly, it makes sense for everyone to own gold, not as an investment, but as insurance.

Falling In Love With An Asset Class by The Logic Group

Too many financial advisers, analysts, and individuals fall in love with one particular asset class and are always looking for it to shine above all others. If you are talking with someone who has a background heavy in fixed income they relate to everything else through bonds and often recommend a higher exposure to fixed income assets. You might also see someone with a tilt towards large cap growth or large cap value investing and they always feel that these assets will do better than other assets. It is rare to find an advisor that does not have some sort of bias.

The Focus of The Rational Investors by The Logic Group

This site’s focus is to provide financial education for independent investors or those who want to be independent investors. We want to encourage you to learn to think for yourself and understand that being financially educated is your responsibility, as are the decisions you make about your finances. In today’s society our young people are not taught to be financially savvy, which leaves them especially vulnerable to the high pressure sales pitches from financial institutions. In fact, much of the “information” the average person is exposed to about the financial world is actually an elaborate sales pitch. Many otherwise educated, successful, intelligent people are naïve about the world of personal finance.

Financial Assessment by The Logic Group

We believe it is time to take a step back and examine your financial affairs to better understand where you are. It has been a volatile year, and you need to think about how you have fared, and where you should be headed.

Wealth Building Plan by The Logic Group

Everyone should develop a wealth building plan. Unlike a financial plan, a wealth building plan focuses on effectively turning effort into wealth. Thus, it recognizes the fact that the right effort and skill can create wealth and seeks to effectively maintain and grow that wealth.

Newest Blog Entries

Author:	The Logic Group	Created:	3/7/2009 8:37 PM
The Rational Investors

The Benefits of a Balanced Approach

By The Logic Group on 2/9/2010 10:11 AM

A while back we discussed the flaws with an age based approach to your asset allocation decisions. We would like to expand upon that thought by looking at how a balanced portfolio can lower your volatility and potentially improve your investment results no matter what cycle of life you are in.

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Congratulations to the New Orleans Saints

By The Logic Group on 2/8/2010 10:27 PM

It has been a long time coming and we are very happy for them. This has nothing to do with finance, we are just happy for them.

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Wake Up America

By The Logic Group on 2/8/2010 11:04 AM

Normally, we find Paul Farrell a little annoying, however his recent commentary on Marketwatch.com is right on. It is time that we all wake up and realize that we have many problems that need to be addressed right now. As Mr. Farrell points out, and we completely agree, there are many ticking time bombs out there right now and any one of them could take down our way of life.

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Fixed Income

By The Logic Group on 2/6/2010 8:59 PM

The concept of fixed income is enormous and extremely complicated. We will attempt here to give you a quick look at what the concept means, and why it is important to you. If there are any fixed income geeks reading this you may be offended by the simplicity with which we deal with this subject; however, please keep in mind that the intricacies of the yield curve are beyond the scope of this piece.

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Why Banks Are Not Lending

By The Logic Group on 2/2/2010 12:04 PM

We hear a lot of talk out of Washington these days about how they want banks to lend. They supposedly passed TARP, and still pass money out under this vehicle, with the idea that they would put money in the banks so they can lend money and stimulate the economy. On one hand we have the folks in Washington stomping their feet and scratching their heads unable to fathom why their efforts have not worked.

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Ideal Roth Conversion Criteria

By The Logic Group on 1/18/2010 10:34 AM

As promised here is more on Roth IRA conversions. Whether or not to convert your traditional IRA to a Roth IRA is not an easy question and there are many factors involved. We cannot give you specific advice for your situation, but we can lay out some key signs that a conversion may be right for you. Below is our ideal conversion candidate.

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Roth IRA Conversions

By The Logic Group on 12/22/2009 10:32 PM

As we put to bed another wacky financial year it is important to start planning for 2010. You will soon start to catch the buzz of converting your IRA to a Roth IRA. In 2010 there is a unique planning opportunity in that no matter what your income you are capable of converting your traditional IRA to a Roth IRA. Normally this is restricted to taxpayers with a modified adjusted gross income below $100,000. There are a few other key advantages, such as being able to spread out the tax burden over two tax years. This being said a conversion is not for everyone. When deciding if you should make the conversion here are a few of the key points we think you should consider.

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Important Points Regarding Financial Planning

By The Logic Group on 11/17/2009 1:38 PM

Most consumers have the idea that a financial planner can give you answers regarding; e.g., whether you will have enough money for retirement or college funding. While financial planners do have suggestions, they cannot truly give you complete answers.

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