When Should You Not be in the Stock Market?

The answer, of course, depends on whom you ask. Here’s our argument: You should not be in the stock market whenever you may have to sell your entire investment. Note that the question is not “Is this a good time to be in the stock market?” If you understand the distinction between the two questions,…

Will You Live Longer than Your Retirement Income Portfolio: Part Two

The Retirement Spending Curve The previous essay made two important points regarding retirement income security: The dollar value of your nest egg is less important than the ratio of that value to your planned spending; and, A 2013 study suggests that financial advisors may underestimate the true costs of retirement by failing to account for… Read more »

The Difficulty of Predicting Financial Market Performance

The last essay reviewed the dismal 2014 forecasting record of “financial experts.” The inaccuracy of these forecasts is a primary reason not to let your eyes get too big when you hear a pitch for can’t-miss wealth strategies. For those with a short memory, we recall the parade, in 2005-2006, of full-page newspaper ads, coupled… Read more »

How Did 2014 Financial Forecasts Turn Out?

I thought it might be interesting to review Barry Ritholtz’s column from the January 5, 2015 BloombergView section of the Bloomberg.com financial news website. Early each year, Mr. Ritholtz chronicles the previous year’s forecasting trends. Mr. Ritholtz thinks the propensity of TV and other popular financial media managers to tout the forecasts of “financial experts”… Read more »

Investment Issues for Retirement Income Planning

In the area of investment planning, a good question is sometimes more valuable than an answer. When faced with a complex task like designing and implementing a retirement income portfolio, failure to consider critical issues often results in defaulting to high-cost, problematic, product-based solutions. If the first investment-related question that you ask is “what investments… Read more »

Winning the Investment Game: Part Two

As with many financial decisions, deciding what to buy comes down to dollars and cents. You could be in the market for a new house, a new health insurance policy, or investment advice. Whatever the case, you want to make sure costs are justified in terms of the products and services that you receive. In… Read more »

Winning the Investment Game: Part One

A person saving for retirement who chooses low-cost investments could have a standard of living throughout retirement more than 20% higher than that of a comparable investor in high-cost investments.  — William Sharpe, Nobel Prize winner in Economics What are the two most effective long-term strategies for achieving investment success? Investors often guess “picking good… Read more »

Selecting an Investment Advisor: Whom Do You Trust?: Part Four

How do you select a financial advisor? There are hundreds of advice articles on this question. Usually they take the form of “The six things you should know before signing up an advisor,” or, “The ten questions to ask an advisor.” The best advice available is the Securities and Exchange Commission’s paper “Investment Advisers: What… Read more »

Selecting an Investment Advisor: Whom Do You Trust?: Part Three

Previous posts provide: (1) a brief overview of the financial advice industry and its professional credentials, and (2) evidence suggesting that much of the financial products and services industry could be fairly characterized as a self-serving marketing machine. If you decide to work with an advisor, you want to make sure that he or she… Read more »