During the years following the financial crisis Baby Boomers held on to their jobs. Either loath to abandon their good pay or to draw from their beaten down savings, they delayed retirement. Now, perhaps emboldened by the stock market hitting new highs, Boomers are more inclined to head for the exits. Bloomberg reports that 800,000 Boomers opted to retire in the fourth quarter of 2016. For more than five years, the six-month trend for this figure — a significant demographic source of downward pressure on the headline labor force participation rate — had been heading higher, before plateauing … [Read more...]
January 2017 RAGE Gauge Surprise
The numbers are in and my January RAGE Gauge has never looked better, with a reading of Neutral. This is not a stock market indicator, far from it, stocks are not cheap. It is a pulse of the social, political and economic landscape using a proprietary method I’ve devised and tweaked over time. I use it as a back-of-a-napkin snapshot to give me a feel for the current landscape. One component I like to use is background checks, a barometer for final handgun sales, and a measure of fear. The December reading is the first since April 2014 that didn’t produce a record high for its month. This … [Read more...]
To Me There Isn’t a Better Way to Live
Over the Christmas break we were up in Bartlett, NH skiing where, in between time on the slopes, I read the book Tracking the Wild Coomba by Robert Cocuzzo about the life of the late “frontier” skier Doug Coombs. I say “frontier” because Coombs hated the word “extreme.” To him, that meant risk, and he spent his career teaching his ski clients how to reduce risk in their craft. Coombs first experienced big mountain skiing at Mt. Washington’s Tuckerman Ravine, not far from our cabin. He would spend weekends camping at the base, working his craft each day. From there he went to Montana State … [Read more...]
Hedge Funds turn Frugal after Years Long Crisis Nightmare
After years of playing the markets like casinos, hedge funds are facing pressure from clients to avoid risk. After a number of recent failures (read here, here and here), this pressure has increased. This pressure hasn't gone over well with some managers who are fighting back, while others are accommodating their new clients. Laurence Fletcher writes at The Wall Street Journal. An industry once known for maverick traders and huge profits—from George Soros’s $1 billion profit betting against the pound in 1992 to John Paulson’s $15 billion profit from U.S. subprime mortgages—faces a … [Read more...]
Are Americans Making a Big Mistake with Their Savings?
Regardless of the savings vehicle being used, Americans simply aren't saving enough for retirement. The Wall Street Journal reports: Financial experts recommend people amass at least eight times their annual salary to retire. All income levels are falling short. For people ages 50 to 64, the bottom half of earners have a median income of $32,000 and retirement assets of $25,000, according to an analysis of federal data by the New School’s Schwartz Center for Economic Policy Analysis in New York. The middle 40% earn $97,000 and have saved $121,000, while the top 10% make $251,000 and have … [Read more...]
This One Valuable Post Was Your Favorite in 2016
In 2016 Youngresearch.com published a number of posts our readers loved, but this one "You Need to Know Why I Love Vanguard GNMA," was your favorite. I wrote this piece only a short time ago on December 16, but even in that short period it has garnered more pageviews than any other post this year. Here is the piece again in full: Good morning from Newport, RI where at 5:22 am it’s 11 degrees outside, 1-3 inches of snow are expected, and with the wind it feels like -5. In Bartlett, NH my iPhone says it’s -6 outside with the wind blowing 29 mph making it feel like it’s -34. It’s cold outside. … [Read more...]
Will the Pension Portfolio Corruption Scandals Never End?
Yet another pension fund corruption case has been brought against a portfolio manager, this time by U.S. Attorney Preet Bharara, against New York State Common Retirement Fund official Navnoor Kang. Kang allegedly steered business from the state's pension fund toward certain brokerages in return for drugs, strippers, cash and other gifts. If the accusations are true, it's just one more instance in a string of recent pension fund corruption cases. The Wall Street Journal reports: On Wednesday U.S. Attorney Preet Bharara announced the indictment of New York State Common Retirement Fund … [Read more...]
Have You Lost a Valuable Part of Your Life Savings?
It turns out that many Americans are missing out on parts of their retirement savings. With frequent job changes, and confusing enrollment practices, Americans are leaving 401(k) plans and other retirement vehicles that they might not even know exist behind them . Anne Tergesen writes at The Wall Street Journal: As Americans jump from job to job, they are leaving more 401(k)-style accounts and pension benefits with ex-employers. Some lose track of the money, forfeiting a piece of their retirement security. While no one keeps exact tabs on the number of lost retirement accounts, … [Read more...]
What Memories Will We Leave Behind in the Year 2016?
Every year brings a combination of creation and destruction. As the world looks forward to 2017, it's a good idea to take a look back at 2016 to see what has been left behind. Earlier in the year I wrote to you about the closing of the last Howard Johnson's in New England. I wrote: Investors are taking their eye off the ball. With all the hand wringing over what the Fed is—or isn’t—going to do with rates, there’s a much bigger problem lurking in most investors’ statements. It’s called survivorship bias. Most of the big movers never existed when I was a kid. Great ideas or concepts don’t last … [Read more...]
You Know How to Buy, but do You Know When to Sell?
Why are investors better at buying stocks than they are at selling? This question and more were on my mind while reading Michael Lewis’ new book The Undoing Project. At the heart of it, the book is a love story (platonic) between two men, Israeli psychologists Daniel Kahneman and Amos Tversky, and their incredible work on how the mind alters our perception of reality. I won’t tell you more than that. But if you’ve read Moneyball by Lewis, you know the mind can play tricks on you. Reality isn’t an obvious thing. This book, as a continuation of the thinking in Moneyball, is about why it plays … [Read more...]
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