Retirement Researcher

28
Feb

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

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28
Feb

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…

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27
Feb

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…

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27
Feb

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

26
Feb

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

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24
Feb

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

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20
Feb

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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18
Feb

Historical Market Returns – Part Two

Historical Market Returns – Part Two This article is part of a series; click here to read Part One. Moving to bonds, Morningstar data shows that since 1926, the average return from intermediate-term government bonds was 5.2 percent with a standard deviation of 5.6 percent. With the lower volatility, the compounded return is only slightly less at 5.1 percent. For

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12
Feb

Historical Market Returns – Part One

Historical Market Returns – Part One The primary subject of my book is comparing the risk premium with risk pooling as a source of funding for retirement goals. An important step is to first make clear what the risk premium is and how it relates to an investment portfolio. Fundamentally, investors prefer certainty to uncertainty. A bond provides a known

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10
Feb

Overview of Stocks and the Stock Market

Overview of Stocks and the Stock Market Stocks provide an ownership stake in a company. They provide access to company earnings based on its future performance. Companies can pay dividends to their stockholders to return profits to the owners, or they could reinvest profits into the firm to lay the foundation for better performance and even larger dividends to owners

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