Category Archives: Investment, Finance

Thinking about retirement portfolios

Offering Help to Family and Others

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Advice may sometimes be the help that’s needed.

Monday we mentioned that now is a time for generosity. If you have a portfolio, you’re fortunate. Millions of people don’t, and they may need your help. How do you handle that in a compassionate and reasonable way? 

To begin, you must know how your portfolio functions in your life: do you depend on it for year-to-year living? Or is it for extras like travel, gifts, or luxuries? That distinction is important because if you help by selling investments and giving the proceeds, you reduce future investment income. That’s not the case with income from work—giving part of a month’s income to a relative in need doesn’t reduce next month’s income.  Continue reading →

If You Have Cash, Should You Buy Stocks Now?

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Over the last 15 years I’ve met several new retirees who are waking up to the poor condition of their portfolios. They saved and invested for years, often choosing mutual funds or annuities offered by employers, then changing jobs, picking new funds, and so on. At retirement they own a collection of high-cost accounts and an unplanned, hard to discern asset allocation. To fix things—plan an asset allocation and convert to low-cost investments—they have to sell old assets and buy new ones. They ask whether it’s better to do it all at once or string it out over weeks, months, or years? Continue reading →

Radical Retirement for the Kids

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Retire early and fly away

Last time we saw Christy Shen and her husband, Bryce, living one version of a radical retirement: they retired in 2014 (Christy was 31 years old) after only a few years of work. Each year while working they saved more than half of their earnings. Can anyone do that, or were they just lucky to invest when returns were high? Continue reading →

Christy Shen Retired at 31: Is She Crazy?

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Christy and her husband, Bryce, retired in 2014 at age 31; they had about $1.16 million saved, which includes about 4 years of living expenses ($160 thousand–my estimate). Can two people make the money last in Toronto, Canada, where they live? What if they have kids? Continue reading →

Money as Omen and Memory

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At the Ranger School, our public phone was more modern, but this one reminds me of 1963.

Old phone reminds me of the phone we had at the Ranger School in 1963, though ours had coin receptacles and a rotary dial.

Last winter, my younger brother, Bill, showed me a notebook I left at home over 50 years ago. It had two pages of expense entries from the summer of 1962, after graduating from high school, and from 1963, when I attended the New York State Ranger School, a forestry technician school in the western Adirondack Mountains of New York. Money spent: I wanted to see what the entries might tell. Continue reading →

Passive Investing: Seniors Near the Edge of Change

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New England 2011_001 With Text

I recently taught a course to retirees on passive investing at the University of Georgia’s Osher Lifelong Learning Institute (OLLI). Many in the class had portfolios with various brokers or financial planners, some local, some far away, and the portfolios were complicated and laden with high-cost mutual funds as well as individual stocks and bonds. They were not making much money, and they wanted to hear about a different approach. Continue reading →

Wrestling Unknown Knowns: Better Investing

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Department of Defense photo

Department of Defense photo

Remember Donald Rumsfeld, Defense Secretary from 2001 to 2006? In response to a reporter’s question about weapons of mass destruction, he offered us valuable epistemological insight into known knowns, known unknowns, and unknown unknowns. Here’s a link if you have 35 seconds to enjoy a little history.

Mr. Rumsfeld never mention unknown knowns, with which investors often wrestle. Continue reading →

Winning the Loser’s Game

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Securities markets depend on markets for goods and services

Securities markets depend on markets for goods and services

Most of us enjoy movies, and there is a new one freely available on the Internet entitled, “How to Win the Loser’s Game.” If you have or want investments, this video is an excellent way to learn the essentials of investing. Fix some popcorn, open a soft drink and settle in front of your TV or computer. You will hear clear explanations of key ideas along with good interviews of people involved in creating modern investing.

Viewers can watch the film in one showing of 80 minutes, or in ten parts of varying length. The film comes from Britain, and the narrator has a pleasant British accent, adding perhaps a touch of class.

Continue reading →

A Winner: Passive Investing in 2014

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$$-2

With the end of 2014, year-end investment returns are coming in, and two noteworthy results are these:

  • Passive investing, especially with Vanguard Group, continues to gain momentum
  • Passive investing, according to preliminary results, produced higher returns than many competing styles of investing.

Continue reading →

What the Big Guys Say about Risk at Retirement

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S_13_197

What should your stock allocation be at your retirement date, or in different words, how much risk (variability) should you tolerate near and at retirement? I discussed this issue in a series of posts earlier this year (see links at end), and recently the Wall Street Journal (WSJ) published an article (paywall) about it.  Continue reading →