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Investment Research Since 1978

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What Do You Need to Do Before You Retire?

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Are you ready to plan ahead and to avoid rookie mistakes in retirement? At Money, Alix Langone discusses some of the things retirees need to do before they retire. He writes: It’s the biggest worry for people approaching retirement, financial advisors say: “Will I have enough? Where’s my cash flow coming from?” But if you actually map out your spending ahead of time, you’ll know the answer (at least for the short term), and you’ll enjoy greater peace of mind when you stop working. At a minimum, it’s important to figure out your first three to five years of cash flow — the money you will … [Read more...]

When You Get OLD, Things Have to Be RIGHT

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It all started for Chuck Berry on 21 May 1955 with Chuck’s simple three-chord--Bb, Eb7, F7 (played in A by many guitarists for ease)--recording of Maybellene, an adaption of “Ida Red,” with Jerome Green on maracas, Johnnie Johnson on piano, Jasper Thomas on drums, and the legendary Willie Dixon on bass. By the end of June 1956, “Roll Over Beethoven” ran to #29 on the Billboard charts. Berry would go on to produce hit after hit, including “School Days,” “Rock and Roll Music,” “Sweet Little Sixteen,” and “Johnny B. Goode.” Berry, the Real King of Rock & Roll, died in March of 2017, … [Read more...]

Build Your Investment Strategy for the Field of Play

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Are you a trader or speculator? Or are you long term investor saving for a comfortable retirement? What’s your field of play? In December of 2011 I wrote to readers explaining that each sport is dependent on the field of play. Coaches and players enter the game with a clear understanding of what they are trying to achieve, and the area within which they are trying to achieve it. Does that describe your current investment planning picture? If not, your first step is understanding your field of play. I wrote: Football, baseball, soccer, hockey—each has something in common that can be … [Read more...]

Underfunded Pensions and a Devil’s Bargain

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In Pontiac, Michigan, pensions for public employees have been underfunded for years, and the city is going to raise taxes to help fund pension payments. This same predicament is playing out across America, with pensions in many states and cities woefully underfunded, and with pension boards who overestimate returns to paper over the problem. Like many pensions, those in Pontiac are restricted on the proportion of assets that may be invested in equities compared to fixed income and other securities. The current limit is 40% of assets may be invested in equities. These limits are in place … [Read more...]

Wealth Management Pitfall: ESG

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Don't fall into the ESG trap. Read what I wrote here on December 11, 2018. Your wealth manager should act as your fiduciary, plain and simple. Sounds easy. But in reality it’s not. Today, I want to help you overcome one of the more absurd obstacles you may face. It’s called environmental, social and governance investing, or ESG. Thousands of investment managers have pledged to follow ESG—a pledge to abide by a U.N.-sponsored statement of ESG principles. Investing in fossil fuel stocks, for example, would likely be on the “no go” list of companies available for investment. You can forget … [Read more...]

The Double Whammy Hitting Today’s Retirees

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Retirees today are overcoming a mountain of bad timing. Read why in this post I wrote on December 3, 2018.  Retirees today are the victims of an unfortunate double whammy. In the prime home-buying days of their youth, they were forced to pay the exorbitant mortgage rates of the late 70s and early 80s. Then, during the Financial Crisis, which should have been the peak of their earning and saving years, many lost jobs and watched their stock holdings evaporate. In the following years when many would have typically moved more of their portfolio into fixed income, they were left with the crumbs … [Read more...]

Can You Afford a 50% Loss?

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Can You Afford a 50% Loss? That’s the question I asked readers in March 2014. I wrote: Can You Afford a 50% Loss? It’s impossible to have it all ways. In order to craft an investment portfolio that can act as an all-weather armadillo, you must be willing to forgo potentially substantial upside rewards to balance against the horror of a downside wipeout. If you are retired or saving for retirement in the not-too-distant future, you can easily get a knot in your stomach when you look at the basic math of downside portfolio protection. By example, when you lose 50% on an investment, you must … [Read more...]

“E.J., Has Your Phone Been Ringing off the Hook?”

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With market volatility creeping upward, this is once again a question I'm getting, but I urge you to reread what I wrote back on February 28, 2018.  Well this was a fun month for the stock market with wild swings from high to low of around 2,000 points in the Dow Jones Industrial Average. One question I’m asked on a consistent basis is “E.J., is your phone ringing off the hook?” and my answer is “no,” and I know why. Most of you have been educated by Dick Young that investment success is achieved over a lifetime, not a month or two. Investment success is about hitting singles and … [Read more...]

Top 10 “Retirement Killers”

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There are a number of ways to mess up your retirement plan, but some are more dangerous than others. At MarketWatch, Brett Arends lists the top 10 "retirement killers." His list comes from an NBER research paper called "Saving Regret," written by Axel H. Börsch-Supan, Tabea Bucher-Koenen, Michael D. Hurd, and Susann Rohwedder. Arends explains the survey, writing: A survey of “Saving Regret” targeted 1,600 Americans aged 60 to 79 to ask them about whether they had saved enough money — and if not, why not. The survey was conducted by researchers from the RAND Corporation and the Max Planck … [Read more...]

Stock Markets Scaring Gun-shy Retirees

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The common theme I espouse to you here at Your Survival Guy is the elimination of risk and a focus on your margin of safety. Whether the risk be to your personal safety or to your financial portfolio, I want you to focus on preventing negative events from affecting you and your family. After 2008, some retirees and those who were planning to retire understood the dangers of market risk, and began insulating their portfolios against future shocks. They spread out their investments among different asset classes, buying counterbalancers to smooth any market swings. They also began focusing … [Read more...]