Coronavirus Infects Stock Market: Part LIX Severe lockdowns in blue states are driving unemployment to Depression Era levels, and devastating the finances of working-class residents. Before their governors went wild with lockdowns, these same workers had been enjoying their best economy in decades. The Journal reports on the skyrocketing unemployment in blue states: The Labor Department on Friday reported jobless rates in May for the 50 states, and the news is the greater than usual variation. Some state economies are recovering much faster than others, and the worst performing tend to be … [Read more...]
Your Retirement Life: A Grizzly Yellowstone Trip
You can still have the retirement life you deserve, it just takes a little more time and patience. I think you'll like these pics from a client who writes: "Hi EJ- thought you might like to see a few shots from Grand Teton/Yellowstone. When we got home, we ran across an article about that specific bear. Google Grizzly Bear 399 and look for the recent article about her and her cubs." Here's the story about Grizzly Bear 399, from Mike Koshmrl at Jackson Hole News & Guide: Steve Franklin’s lifetime bucket list included both being in Grand Teton National Park on opening day and … [Read more...]
California Pensions are Dreamin’
You really can’t make this up. Rather than admitting that they've spent years making the wrong assumptions, and underfunding the pensions of California public workers, CalPERS pension fund managers seem hell-bent on driving the fund off a cliff to save their jobs. In the Wall Street Journal, Ben Meng, chief investment officer of Calpers, does his best to explain why the fund is taking on a load of leverage to fund its overpromised goals. He writes: Yet even before the pandemic, we knew that our goal of achieving a risk-adjusted return of 7% would require addressing the market’s triple … [Read more...]
Why Would China Have a Problem with This?
How are you doing? Surviving? In my conversations with you, you’re telling me you’re ok, or you email that you’re ready to get your life back. It is such a strange time with so much chatter in our heads. We need a break from ourselves. You’re telling me about your life and I’m hearing the differences depending on where you are—you’re ok in the heartland, but the coasts are another story. A valued reader writes from the tranquility of the Sierras explaining how different it feels from downtown San Fran. Another was just at Yellowstone and another, in New York, explains how this has been … [Read more...]
Close to One-Third of Investors Over 65 Moved to Cash
Coronavirus Infects Stock Market: Part LVIII How are you doing this morning? Hopefully, you’re not too shell shocked. If you are, then you’re not alone. A study by Fidelity Investments finds that close to one-third of investors over the age of 65 sold their stocks during the coronavirus meltdown reports The WSJ. Like a broken record, money managers tsk, tsk, tsk the sellers saying “hold your stocks for the long-term.” Well, that’s fine and good if you’re in your thirties, but a bit more difficult when you’re over 65. A prospective client wants to consolidate her assets with us mainly … [Read more...]
Your Retirement Life: Investing After Coronavirus
Coronavirus Infects Stock Market: Part XXX Originally posted on April 20, 2020. Some thoughts as you second guess your retirement (or your spouse does for you). The late Richard Russell, in remembering the Great Depression: The most valuable asset you have is a J-O-B. (You know RR from Rich Man, Poor Man, an all-time favorite of mine.) Russell knew the pain when his father was jobless; losing confidence and self-worth; remembering a job does a lot more than just provide money. Our loudmouth governors will not be able to keep Americans indoors forever: Don’t Tread on Me. Make it … [Read more...]
Your Retirement Life: What Will Her Life Be Like Now?
It’s foggy this morning, but the light coming from my daughter’s bedroom is bright because she’s away on a trip, and her door is wide open. It’s heartbreaking walking down the stairs knowing this is what it will feel like when she leaves for college. Every step I feel the weight of: did I spend enough time with her, will she be ok on her own, is she happy, what will her life be like now? It’s heavy. That’s being a parent. Your kids grow up and leave you, then you have grandchildren, they visit, they leave, and it’s the same feeling all over again. And you say to yourself: Next time … [Read more...]
Your Survival Guy Escapes into the City, Uh-Oh
Coronavirus Infects Stock Market: Part LVII Heading into a city and putting your daughter on a plane are not things Your Survival Guy likes doing, nevermind in the middle of a crisis. But sometimes visiting a cousin in Naples, FL is what an eighteen-year-old needs to do for everyone involved. Becky and I couldn’t help but notice, about thirty miles south of the city, the flashing signs: “If You’re from Out of State We Urge You to Self-Quarantine for Fourteen Days,” which made us wonder: “who in their right mind is going to follow this BS?” Then we passed a car with its driver, all alone, … [Read more...]
For You I Want Steady Income and Here’s Why
When you own an income-producing asset, you’re immediately in a position to harness the power of compound interest. Too often, investors get caught up in the ups and downs of the market rather than the flow of cash into their pockets. The basic premise behind selling at higher prices means you need to get rid of your asset, your golden goose, to make money. I don’t like that game for you. For you, I want steady income. Take care of the income, mix in some time, and the price will follow. I like this wonderful piece written at Vanguard that lays it all out. The more time you have, the … [Read more...]
How Valuable is Thirty-Thousand?
You want some ugly math? Look at public pensions. They assume an expected rate of return above seven percent. What if that’s not met? In the real world, there are consequences. Take, for example, a million-dollar portfolio. If you “need” a return of seventy thousand, or seven percent, what happens if you don’t get it? You’re underfunded. A more reasonable expectation would be, say, four percent, or forty thousand. Pensions are invested in a mix of bonds and stocks, so getting stock market returns is basically impossible. In the above example, an actual return of four percent leaves a … [Read more...]