There are a lot of cliches in retirement planning. And a lot of them are cliches for a good reason – they’re good advice. But not always, and more than a few of them are right for the wrong reasons.
One of those cliches is that with investing you need to focus on the long term to reduce the risks from investing. It is absolutely true that investing is a long-term activity, but is that second part true? Do stocks (and other types of investments) get safer the longer you hold onto them?
Inflation is a fact of life. It’s also not so great for retirees. In fact, it’s one of the biggest risks that retirees face. By constantly eating away at the value of our savings and income, inflation will slowly reduce our purchasing power in retirement – if we don’t do anything about it.
The appeal of market timing is obvious. Who wouldn’t want to get in and out of the market at the best time every time? We’ve talked a lot about market timing in the past – timing risk premiums, trying to time the markets on a daily basis, and the importance of staying disciplined even when it seems obvious the markets are going to go down.
The numbers show that active management simply doesn’t work. There are several arguments against active fund managers, but one of the most damning is that winners don’t seem to repeat.
Every four years we talk about how this year’s Presidential election is the most important ever. Along the way, people make a whole host of sweeping statements about how picking their team will lead to all of the good things happening, but picking the other team will lead to all of the bad things happening […]
All too often, the funds you use end up sabotaging your asset allocation. What if the funds you select don’t do what you think they will? When you use actively managed funds, you have to watch out for something called “style drift” – when a fund’s style (what the fund actually owns) moves over time.
The market is going to drag your portfolio through every mud puddle it finds. It’s your job to pick your portfolio up, dust it off, and point it back in the right direction. Rebalancing brings your portfolio back into line, and ensures that you are taking the right amount of risk through time.
Everyone always talks about investing (and planning) for the long term. But they’re usually vague about what the “long term” actually means. Does that mean 5 years? 10 years? More? (Spoiler: the answer is definitely more). And frankly, talking about how you need to focus on the long term can feel like a bit of […]
The financial media loves to talk about interest rates. There are a lot of good reasons for this, but two of the big ones are that interest rates are really important, and they’re relatively understandable and have a direct connection to most people’s lives. They are tied to the mortgage rate you can get, the […]
The 2022 midterm elections are coming up (remember to vote on November 8th). With every election, there’s always a lot of talk about how important it is to vote (true), and that if the other side wins it means the end of the world (potentially less true). There are always important issues at play, and […]