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The Problems with Indexing
Index funds dominate the passive management landscape (though they are not the entirety). But just because there’s no way to guess which active managers will do well in the future doesn’t mean index funds don’t have problems themselves.
The Difference Between ‘Safe’ and ‘Optimal’ Withdrawal Rates for Retirement Spending
Distinguishing between “safe” withdrawal rates and “optimal” withdrawal rates is an essential piece of the retirement spending conversation.
5 Companies Comprise One-Third of S&P 500 Returns – Is This the Death of Diversification?
Everyone is always eager to declare the death of diversification. They say it fails in
Taking Portfolio Spending Into the Real World for Retirees
There has been too much emphasis on the portfolio and spending conservatively to keep failure rates low. This is not the whole story for retirement income. Certain circumstances, which we will explore, may allow retirees to accept a higher probability of “failure,” and spend more aggressively from their investment portfolio.
Heads My Stocks Win, Tails Yours Lose: The Difference Between Daily Returns and a Coin Flip
We all wonder how the markets did today. Whether it’s actually useful information or not doesn’t seem to matter. Daily returns present an easy, attention-grabbing story the media can fill a couple minutes with every day.
What Can the Retirement CARE Analysis™ Tell You About Your Retirement Plan?
The Retirement CARE Analysis can help you figure out your asset allocation and an appropriate spending rate for retirement.
Do Bonds Help Diversify Your Investment Portfolio?
Diversification is a good thing. It’s the only free lunch in finance.
The Possibilities of Broader Diversification in Retirement
Often, retirees are limited to accepting whatever a researcher assumes about market returns in order to obtain guidance about sustainable spending rates. I proposed a general framework for determining a safe withdrawal rate for a given retirement duration, acceptable failure probability, asset allocation, and capital market expectations.
Should You Use a Rising Equity Glide Path in Retirement?
Retirement income comes in many forms. Wade Pfau considers the pros and cons of a rising equity glide path.
What’s the Most Appropriate Planning Age for Retirees?
The relationship between how long you’ll live and your sustainable spending rate is a big piece of the retirement planning puzzle.
The Dangers of Putting Our Faith in Statistics
Statistics are great and all, but just because the numbers say something will happen doesn’t make it the gospel truth.
Which Makes More Sense for Retirees: A Total-Return or Income Portfolio?
Total-return investing focuses on building diversified portfolios from stocks and bonds to seek greater long-term investment growth.
