Retirement Watch Weekly
Estimating Future Stock Returns
A major debate among stock analysts these days is the level of future returns that is reasonable to expect. Some argue that despite high valuations and profit margins today other factors will allow stocks to appreciate near historic average levels for the coming 10 years or so. Others argue that future returns have been pulled […]
The Importance of Age 69 1/2 in Retirement Planning
Most people in retirement planning learn that age 70 1/2 is important. Here’ an article arguing that the year before is more of a benchmark. You have to start planning for the following years’ RMD, and it also means you’re approaching other key IRA milestones. Age 69 1/2 is a big deal, a major year […]
No Famous Stock Pickers
In the 1980s and 1990s, managers of stock mutual funds ruled the investment world and received a lot of attention from the media. Star fund managers were almost household names. That’s not the case now. According to this article, the top stock pickers are unknowns who receive no attention despite great records. The changing fortunes […]
Taking Apart Target Date Funds
Target date funds are becoming more popular, especially in 401(k) plans. These are funds that change their asset allocation over time based on the assumed age of the shareholders. For example a target date 2020 fund is supposed to be owned by someone who plans to retire in 2020. But these are a new part […]
Should You Be Holding Cash?
Mohammed El-Erian, formerly of PIMCO, stunned a few people when he announced recently that his portfolio primarily was in cash. I know a lot of small investors also are heavily weighted in cash, because they’re afraid of all the other investments. Here’s an analysis of why you don’t want to be 100% in cash in […]
Medicare Advantage Plans Receive a Boost
Under the Affordable Care Act, Medicare Advantage plans are supposed to be made less attractive. The government is supposed to reduce the amount the plans receive per enrollee. But that hasn’t happened. The plans are very popular, enrolling about 30% of Medicare beneficiaries and rising. For the third year in a row the government announced […]
Some Fallacies of the S&P 500
This post notes that the S&P 500 wasn’t always capitalization weighted. Until 1988 it was structured much like the Dow Jones Industrial Average but with more companies. There are a lot of thoughts that can spring from that information. One of them is that index investing isn’t really passive investing. It’s true that most active […]
Diversification, De-Risking and Other Thoughts
Investors are very nervous about owning stocks these days, but they also don’t want to miss out on a continuation of the bull market. If that describes you, and you’re not sure what to do, consider this article. It’s written primarily for institutional investors (pension funds and such) and might seem to ramble a bit. […]
