Posts Tagged ‘Wall Street Journal’

Taking stock of year-end advice

Wednesday, December 21st, 2011
taking-stock-of-year-end-advice

In the past week I’ve read half a dozen articles on major financial websites urging yield-starved investors to switch from bonds to dividend payers. The pitch? That you can get a higher yield with less risk with dividend-paying stocks than you can with bonds, whose yields are depressed as flight-to-safety investors bid up their prices.

The numbers seem to support that view. The yield on a 3-month Treasury is 0.01 percent. The 10-year yields 1.87 percent, the 30-year a mere 2.85 percent. Savings accounts earn 1 percent at best. At the Vanguard Group, which keeps fees low with a religious fervor, the prime money market fund carries an SEC yield of 0.02 percent. That makes the dividend yield on the S&P 500, now 2.1 percent according to Fortune, look like a windfall.

That’s a great deal, unless you want to preserve your principle, or you’ve forgotten the collapse of both the tech and housing markets. The chance of losing money in a savings or money market account is slim. The chance of losing a significant chunk of your stock fund is much greater. Just look at the performance of the markets in 2011. Writing in USA Today John Waggoner says that the S&P 500 index has lost 1.4 percent this year. It gets worse for the average diversified U.S. stock mutual fund, down 5.9 percent to date, according to Lipper.

Not so for the dividend payers. In 2011 the 100 stocks in the S&P 500 with the highest dividend yields are up an average of 3.7 percent before their dividend payouts are calculated, according to Birinyi Associates (as quoted in the Wall Street Journal). There are two problems with using that analysis to power your portfolio. You can harvest those profits only if you constantly screen for those stocks, a job better left to the professionals. And the numbers disguise higher expenses for managed funds. The average mutual fund charges about 1.3 percent a year. Savings accounts charge nothing.

That so-called stock-market bonus—you can book capital gains as well as dividends—makes for a tantalizing but specious argument. Stocks and stock funds will lose money. Savings won’t. Neither will individual bonds held to maturity. If keeping pace with inflation is an issue, TIPS held to maturity should answer the call.

Comparing stable assets to variable ones does investors a disservice. Financial writers and advisors should compare similar assets and decide which ones offer the best yield in that class. Anything else, as Ecclesiastes wrote, is a striving after wind. Or the latest end-of-the-year investment guide.

Impulse writing

Monday, November 7th, 2011
impulse-writing

Writing that flows is often based on a solid structure.

Take the piece “Why impulse spending can be a good thing” by Katherine Rosman, who writes the Checks & Balances column about finance and marriage for the Wall Street Journal. The article is designed to read like a short story with comments, unfolding through scenes with increasing drama. We want to determine what happens between Rosman and her husband Joe, who in their struggles to mesh their opposites-attract financial styles have become persons of interest.

The article is structured in three parts. The first details a recent event, the second one that took place a while ago, the third the night the two met. All involve charity auctions. All create an orderly march backward in time, from a seemingly frivolous exchange to a defining moment. Each segment seems ordinary yet together they build toward a quiet but profound insight you’d see in the work of Anne Tyler or Anna Quindlen.

The parts consist of anecdotes, all of which bring to life the article’s theme—that contrary to popular wisdom occasional impulse spending can provide rewards to even the most budget-minded couples. Those mini stories also illustrate a greater wisdom: we can argue about spending but what we really value is not the behavior but the relationship. The real prize isn’t the money, it’s the person.

When I worked as a writing coach for a newspaper owned by the publisher of the Wall Street Journal I studied briefly with the great Roy Peter Clark. Now vice president of the Poynter Institute, Clark taught us to use the tools of fiction writers while rigorously adhering to the facts. Structuring a story that way is more than playing dress-up. It’s a process to present and order events with all of the immediacy and emotional resonance of direct experience.

It’s good to see other non-fiction writers have adopted the storyteller’s technique. Using those tools, Rosman ratchets up the conflict between spouses with a deceptive calm that shows rather than tells about their relationship. The story flows without effort. Even the ending feels natural, a surprising valentine to financial and emotional conservatives everywhere.

Talk about impulse control.

The good word

Sunday, January 3rd, 2010
the-good-word

Good writing can come from any place, not just fiction or poetry but ads, blogs and articles about business and science. It is muscular and inventive. It captures the heart and soul of characters, objects and readers. It nails that undefined emotion that’s been rattling around in our guts for years. And it’s largely invisible.

JohnPipkinGood writing lives in literature. Witness John Pipkin (Woodsburner) as he describes the fire that nearly consumed Concord: “Henry [David Thoreau] looks up . . . and sees a host of elfin flames leaping into the air, one upon the other, riding the wind. . . . The fire advances in a crooked line a dozen times the length of Henry’s arm. The pine needles, though quick to ignite, are easily spent, hardly fuel enough to sustain the flames for more than a few seconds at a time. And the fire knows this; it behaves in accordance with its own set of a priori truths. It must keep moving and consuming to survive.”

LaurieRKingIt lives in contemporary fiction. Watch Laurie R. King (The Beekeeper’s Apprentice) as young Mary Russell verbally jousts with the legendary Sherlock Holmes: “A series of emotions crossed his face, rich reward for my victory. Simple surprise was followed by a rueful admission of defeat, and then, as he reviewed the entire discussion, he surprised me. His face relaxed, his thin lips twitched, his grey eyes crinkled into unexpected lines, and at last he threw back his head and gave a great shout of delighted laughter.”

Good writing lives in blogs, as Joyce Maynard (Labor Day) shows in this edited version of her essay, “In the kitchen of discontent”: Seven years after I separated from my children’s father it was still hard going back to our old house. For the first time in ages, I stepped into my old kitchen. A bitter taste rose in my throat, like what happens when you think you’re going to throw up, but you don’t. I stepped into the hallway and glanced at the bed where all three of our babies were born. I went back in the kitchen, ran my hand over the wood of the kitchen counter, where I must have prepared a Joyce Maynardthousand meals, and looked out the window, to an eerie and beautiful streak of light from a full moon slashing across new fallen snow. I remembered another full moon night, when my husband and I had skated on black ice on the pond down the road, and another full moon night, when we’d fought so bitterly I paced the rooms of this house until dawn, lying down briefly next to first one of my sleeping children, and then another, unable to find sleep.”

It’s kindled by contemporary poets like Barbara Aline Blanchard (I Was a College Dropout), who writes in “Jealousy” about an ex: “She has knots in her eyes/trying to be civilized.”

Good writing thrives in mystery fiction, as in this excerpt from P.D. JamesThe Lighthouse: “This was the air of late October, still unseasonably mild with the first chill of autumn, the air faintly scented, as if the dying light had drawn up from the headland the concentrated sweetness of the day.”

You can find it in the complex and contradictory emotions of the characters that populate novels of suspense. Martha Grimes is famous for climbing inside heads to view life at the granular level, as she does with Inspector Richard Jury in The Old Silent: “Jury’s mood was as black as the biscuit Wiggins was now crumbling into a cup of water, and, irrationally irritated by his sergeant’s pursuit of some elusive and Platonic Idea of health just as he was reading of the kidnapping of one boy and the disappearance of the friend who had been with him.”

You can see it in the work of Ruth Rendell, as in these lines from Wolf to the Slaughter: “The shop squatted under a towering wall of brown brick. It seems to lurk there as if it had something to hide.” And this passage that fuses weather and emotion in a glowering tangle: “A high east wind blowing for a day and a night had dried the streets. The rain would come again soon but now the sky was a hard bitter blue.” With Rendell, even optimism carries a delicious menace.

BrettArendsFiction isn’t the only place good writers come to rest. Two lines from Wall Street Journal writer Brett Arends illustrate that point: “The economy seems to have staggered up from its death-bed (at least for now). And the mother of all fiscal adrenaline hits hasn’t even entered the bloodstream yet.” And Barron’s Alan Abelson is always the delightful iconoclast, as when he holds forth on wayward personalities: “Shakespeare was wrong. A rose by any other name wouldn’t smell as sweet. Suppose, by some nomenclatural misadventure, a rose was called a stinkweed? Does anyone really believe that his or her olfactory response wouldn’t be influenced by the mental abhorrence triggered by the very word ‘stinkweed’?” Overwrought? Yes. On target? Oh yes.

Beauty isn’t always truth and truth isn’t always beauty, at least not in the Judeo-Christian West. But good writing reveals the truth that lies at the bottom of the well. And when we read it, we experience a moment akin to a religious experience, or a good session with the therapist. All is revealed, and remembered, at least until the medication wears off. Which makes what these writers do all the more valuable.

Describing those invisible emotions with precision is an art. Nailing the zeitgeist is a calling, and few do it better than these authors, or business writers Allan Sloan and Stanley Bing. “My bank came up with a way to spare me the shame of overdrafts,” Bing writes in a cheeky essay in Fortune about the financial crisis of 2008-09. “What favor will they do for me next?” That’s the setup. Not wishing to keep us waiting, he delivers the punch line in the opening paragraph: “You know, we don’t thank our bankers nearly enough.”

Or our writers.