Archive for August 2011
Frequent Changes in a Portfolio Seldom Produce Desired Long Term Results.
There were no lakes large enough in South Dakota to entice anyone to go sailing until the mid-1950’s when the 37 mile long reservoir of Lewis and Clark Lake was formed on the Missouri River near Yankton. Locals then took to the sport in earnest. A sailing club was formed. Races were scheduled, and in…Read More
Don’t Ask Your Portfolio To Do More Than It Is Designed To Do.
Some people want more from their investment portfolios than gains and income. Like other major arenas in life—some load more baggage onto a portfolio than it is designed to carry. Making more money guarantees nothing except it will make a person wealthier. An unhappy person will be an unhappy investor. Assuming grinding poverty is not…Read More
Psychological Factors Magnify and Prolong the Negative Impact of Market Losses
Wealthy people can take losses in their retirement portfolios lot easier than middle-income households who have plans for every dime that they have invested. But investors with large portfolios—portfolios that could be reduced by half and still not put their retirement in jeopardy—often fail also to employ coping strategies that help in rough times. In…Read More
Stressed Out Over the Market? Get a Measure of Your Tolerance for Risk.
NOTE: Risk tolerance is key to the design of any retirement plan. In earlier postings, readers were asked to complete the Flexible Retirement Planner (FRP) to find out how well their funds would hold up over their life expectancy, especially in supplementing their retirement incomes. Reading previous postings is important to understanding this article. Putting…Read More
Tolerance and the Ship of State
Matthew and Shirley Wirth throw a hell of a bash for all of the guests on the Fourth of July in Deadly Portfolio: A Killing in Hedge Funds. At an actual dinner party recently, the subject of the proposed Muslim Center for lower Manhattan came up. Our hostess was outspoken. “They are just shoving our…Read More
How Much Should the Middle-Income Household Risk in the Market?
Middle-income families often do not have the resources to employ financial advisors. Yahoo Finance states that middle-income households have an average of approximately $110,000 set aside for their retired years. Financial advisors and brokers at major firms like Merrill Lynch, Morgan Stanley, and UBS Paine Webber are looking for mega buck accounts—accounts with $250,000 or…Read More
Retirement Planning for the Middle-income Household, One Step at a Time – Part II
In Deadly Portfolio: A Killing in Hedge Funds, Matthew Wirth and Morrie Clay work with wealthy people with large sums set aside for retirement planning. As pointed out in the first article in this series, that is not the case for the middle-class American household. In the first post, we accomplished two important initial steps.…Read More
So We Have a Deal. Now What?
The news for the last several days, of course, has been all about the debt ceiling and the debate in Congress about raising it and cutting expenditures. So much has been written and broadcast about the subject that I don’t feel it serves much purpose for me to rehash things here. Thanks to all of…Read More