Never touch your principal in retirement? Think again. More than a century ago, an American financial archetype emerged – the household that lived on the interest earned by its investments, never touching its principal. Times have changed. While the Vanderbilts, Carnegies, and Rockefellers could do that back in the Gilded Age, you will likely face a tough challenge t … [Read more...] about Think Total Return
A look at how variable rates of return do (and do not) impact investors over time. What exactly is the “sequence of returns”? The phrase simply describes the yearly variation in an investment portfolio’s rate of return. Across 20 or 30 years of saving and investing for the future, what kind of impact do these deviations from the average return have on a portfolio’s final … [Read more...] about What is the Sequence of Returns Risk?
How global returns and proper diversification are affecting overall returns. “Why is my portfolio underperforming the market?” This question may be on your mind. It is a question that investors sometimes ask after stocks shatter records or return exceptionally well in a quarter. The short answer is that while the U.S. equities market has realized significant gains in … [Read more...] about Your Diversified Portfolio vs. the S&P 500
That truth must always be recognized. When financial markets have a bad day, week, or month, discomforting headlines and data can swiftly communicate a message to retirees and retirement savers alike: equity investments are risky things, and Wall Street is a risky place. All true. If you want to accumulate significant retirement savings or try and grow your wealth … [Read more...] about Investing Means Tolerating Some Risk
Why are investors and economists getting nervous about Treasury yields? What is the yield curve, and why is the financial media writing about it? Here is a brief explanation, starting with a clarification. A yield curve is really an X-Y graph projecting expected rates of return for equivalent-quality bonds with different maturity dates. But it is not just any yield … [Read more...] about The Flattening of the Yield Curve