Retirement Researcher
How Much Can Retirees Spend On March 11, 2020? It May Not Be What You Think
How Much Can Retirees Spend On March 11, 2020? It May Not Be What You Think Turbulent market volatility and declining interest rates are leaving many people wondering about the viability of their retirement plans. Given where markets are today, will you have enough to meet your retirement spending goals? Attention often turns to the 4% rule, which is a
How Much Should We Depend On The Stock Market?
How Much Should We Depend On The Stock Market? Simple analyses, which look to historical returns as estimates for what retirees should expect in the future, tend to provide an incomplete picture that may overstate the potential for stocks relative to other strategies. We will investigate some of the adjustments that should be made to historical returns to obtain a
Inflation, Deflation, Confiscation & Devastation- The Four Horsemen Of Risk
Inflation, Deflation, Confiscation & Devastation- The Four Horsemen Of Risk Noted financial advisor and historian William Bernstein makes a compelling case for stocks in his e-book Deep Risk: How History Informs Portfolio Design. In the introduction, Bernstein begins by offering an operational definition of risk. Risk is the size of real capital loss times the duration of real capital loss.
What To Make of Market Volatility
What To Make of Market Volatility In recent days, the significant market decline has resulted in renewed anxiety for many of you (I know this is blatantly obvious but stick with us). While it may be difficult to remain calm during a substantial market decline, it is important to remember that volatility is a normal part of investing. Additionally, for
Lessons For The Next Crisis
Lessons For The Next Crisis We wrote this in 2017 and it remains just as relevant today. In early October 2007, the S&P 500 Index hit what was its highest point before losing more than half its value over the next year and a half during the global financial crisis. Over the coming weeks and months, as other anniversaries of…
The Coronavirus and Your Investments
The Coronavirus and Your Investments The Coronavirus is scary. When it’s possible to make reasonable comparisons with the Spanish Flu, that should make you sit up and take notice. Aside from the reasonable precautions that you should be taking, what should you be doing to protect your investments from the disruptions that the Coronavirus may cause? We’ve already seen significant…
Unpacking Today’s Market Returns
Unpacking Today’s Market Returns Today, March 9th, 2020, was a bad day for the financial markets. There are four main elements to this story that I want to pick apart… The post Unpacking Today’s Market Returns appeared first on Retirement Researcher. Source: Retirement Researcher Unpacking Today’s Market Returns
The Case for Stocks
The Case for Stocks The case for using an aggressive investment portfolio with a high stock allocation to fund retirement expenses rests on the idea that it will probably work. Stocks are expected to outperform bonds, and if and when that happens, a retiree will be able to spend more from their asset base in retirement. For example, in… The
Modern Portfolio Theory – Part Two
Modern Portfolio Theory – Part Two This article is part of a series; click here to read Part One. Efficient frontier diagrams do not actually show the asset allocations of portfolios on the efficient frontier, but this information is also available. Exhibit 1.3 provides an example of ten portfolios on the efficient frontier shown in Exhibit 1.2. These range from
Modern Portfolio Theory
Modern Portfolio Theory Before shifting into further discussion about whether these historical numbers provide the most appropriate assumptions for future market performance, it is worth understanding how to choose an asset allocation and put together an investment portfolio while assuming that these historical numbers are the right ones to use. The more basic point is that any assumptions… The post
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