Retirement Watch Weekly
Understanding the 1929 and 2008 Stock Market Crashes
This is another long one from The Philosophical Economist, but it is worth the time. The basic argument is that people generally misunderstand why stocks declined so much in 1929 and also why they fell in 2008. The writer believes that it wasn’t valuations, and that’s an important lesson for today when many people point […]
Evaluating Estimates of Future Stock Market Returns
A number of analysts are estimating that investment returns over the next 10 years will be less than the long-term average, perhaps considerably less. They estimate annualized returns from stocks of 3% to 4% in many cases. Among the most prominent is John Hussman of the Hussman funds. This post pulls apart Hussman’s methodology and […]
Is There a Retirement Crisis?
A couple of economists recently published a report arguing that the media and a number of economists overstate the problems Americans will have being financially ready for retirement. They questions several assumptions in their estimates and make some different assumptions in their study. In this link, you can read a summary of their report and […]
Risks of the 401k to IRA Rollover
When people retire with a 401(k) balance or a pension plan, there’s an army of financial salespeople trying to get them to rollover that money to an IRA managed by the financial salespeople or their associates. That can be a good deal, but apparently for many people it isn’t. They aren’t financial sophisticated and get […]
5 Mental Mistakes that Trim Investment Profits
You know about behavioral economics and how it shows that many of us seem hardwired to make decisions about money that are bad for us. Contrary to what economists say, people aren’t rational and profit-maximizing. Here’s a good summary of the five most common mental or thinking traits that lead to bad decisions. Recency effect. […]
Why Are People Holding So Much Cash?
Stock markets and other investments have been on a roll since early 2009. But not many investors have enjoyed the increase. Investors are holding a lot of cash in their portfolios, and they increased cash holdings as markets rose, according to a new study. Why? Mostly because after the financial crisis people don’t trust the […]
Using Social Security Estimates with Caution
You can receive from the Social Security Administration an estimate of your retirement benefits. You can call, wait for an estimate to be mailed, or go online and use Social Security’s calculator. The estimates are helpful in retirement planning. But remember these are only estimates. They are based on a number of assumptions that might […]
The Danger of Collectibles Investing
Antiques, collectibles, and other unconventional investments have done well the last few years. That attracts more people to them. Unfortunately, it takes a lot of knowledge or the help of a very good, honest consultant to do well. The big problem is paying too much because an item is either a fake, inferior quality, or […]
