For many Americans the concept of a traditional retirement, thirty or more years of leisure after a productive career is neither realistic nor appealing. Increased life expectancy, better health, and the desire to remain active and productive into their 70s, 80s and even 90s are prompting them to re-examine the concept of retirement. For some, …
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While there are various types of investment risk the proxy most often used by investment professionals is a statistical measure known as standard deviation. In basic terms, standard deviation indicates how volatile and unreliable the returns of an investment can be. The more volatile the expected returns, the higher the standard deviation and risk because …
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There is no such thing as a risk-free investment. Investors are exposed to many different types of financial risk but in the simplest terms everyone faces two fundamental types when investing for a future goal. The first is market risk or the risk that adverse market conditions will cause portfolio losses. The second is purchasing …
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If investor trust in Wall Street and confidence in our regulatory system have not been sufficiently battered, Michael Lewis’ provocative new book, Flash Boys, may be enough to deliver the final blow. The book that previewed recently on 60 Minutes has fueled the debate about fairness in our financial markets. The author is sharply critical …
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Investing your savings to achieve your retirement goals may seem like a daunting task. It does not have to be. A well-designed portfolio is an important element for achieving a secure retirement. Although this portfolio will be different for each of you depending upon your individual circumstances, here are the fundamentals for developing an effective …
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In previous blogs I explained how to estimate the amount you’ll spend each year once you stop working, and the size of the nest egg required to support that spending. The next step is to calculate how much you’ll need to save each year to reach that goal. There are many interactive tools available to help …
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Accumulating sufficient assets for retirement is a lifetime undertaking involving 40 or more years of saving to support 30 or more years of spending. How much retirement income is enough to support spending in retirement? For those who define a successful retirement as the ability to preserve a pre-retirement lifestyle, the question should be, “How …
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Portfolio rebalancing is a powerful risk control strategy that should occupy a prominent role in the management of every investor’s portfolio. Large institutional investors such as university endowments religiously rebalance their portfolios to bring allocations back in line with their original design. Unfortunately, individuals and advisors often allow emotions to override this time-tested and sensible …
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In my last blog I introduced the economic theory and field of study of life cycle finance, a principal goal of which is to construct a useable framework to help individuals improve their financial decision making to produce better monetary outcomes and maintain the smoothest and highest possible standard of living throughout their lives. A central …
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As I write this blog investors have been administered yet another shock in the form of the Institute of Supply Management manufacturing data. The report showed slower than expected growth in U.S. manufacturing and perhaps more troubling, the steepest decline in new order growth in over 30 years. This news comes on the heels of an …
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