How Many Stocks Does it Take to Be Truly Diversified?

By Bob French, CFA

Everyone “knows” you should have a diversified portfolio. What other kind of portfolio would you want? Yet most people don’t really know what diversified means. What does a diversified portfolio look like? How many stocks do you need to own to achieve true diversification?…

Safe Withdrawal Rates for Retirement and the Trinity Study

By Wade Pfau, Ph.D., CFA, RICP®

One of the classic studies in the field of financial and retirement planning is the Trinity Study.

How Asset Location Helps Your Investments Flourish

How Asset Location Helps Your Investments Flourish

By Bob French, CFA

How you invest is the largest determining factor in the level of returns you will see. But what about the “where” of investing?

How Should Retirement Spending Adjust to Investment Portfolio Performance?

By Wade Pfau, Ph.D., CFA, RICP®

A natural starting point for discussions about retirement spending is the 4% rule. William Bengen look at all the different 30 year periods in US history and found that withdrawing 4% of retirement date assets, and then subsequently adjusting the spending amount for inflation over the next 30 years, would have worked historically as a sustainable strategy.

Rob Arnott’s Problem with Target-Date Funds (and Why I Disagree)

By Wade Pfau, Ph.D., CFA, RICP®

Human capital theory says young people’s wealth is mostly in the form of future earnings, giving them the liberty to invest their relatively smaller portfolios more aggressively. This capacity tends to diminish with age. It is here that target-date funds find their basis, and it is also where Rob Arnott and I disagree about the value of such funds

Improving Retirement Outcomes with Investments, Life Insurance, and Income Annuities

By Wade Pfau, Ph.D., CFA, RICP®

Certain approaches to building retirement income strategies offer more spending AND greater legacy.

Charitable Giving with Donor Advised Funds

By Wade Pfau, Ph.D., CFA, RICP®

If you make lots of charitable contributions, it behooves you to understand 2 items with regard to tax planning for donations. 1) There can be large additional benefits…

Why the Dow Doesn’t Work

By Bob French, CFA

With Apple’s addition to the Dow (or more properly, the Dow Jones Industrial Average), now is a great opportunity to look at how to think about the Dow, and indices more broadly. Indices are great tools for understanding what is going on…

Maximizing the Combined After-Tax Value of IRAs and Roth IRAs

By Wade Pfau, Ph.D., CFA, RICP®

In the Spring 2015 issue of the Journal of Personal Finance, I was the co-editor with Joseph Tomlinson for this research journal sponsored by the IARFC. The issue has five articles, and the issue’s theme evolved rather organically into retirement taxation topics.

CoRI Index: A Tool to Lock-in Annuity Prices without Annuitizing

By Wade Pfau, Ph.D., CFA, RICP®

The CoRI Indexes are bond funds whose prices are calibrated to move in lock-step with the price of an income annuity with a 2.5% COLA which will begin income at age 65.

Sequence Risk vs. Investment Risk

By Wade Pfau, Ph.D., CFA, RICP®

A lot has already been written about the sequence of returns risk confronting retirees. But the full implications of sequence risk have not been completely internalized. Retirees become more vulnerable to investment volatility, because as they withdraw from their portfolio they may find themselves locking in investment losses. It’s the opposite effect from dollar cost averaging.

To Rise or Not To Rise: Stock Allocation During Retirement

By Wade Pfau, Ph.D., CFA, RICP®

Both the February and March 2015 issues of the Journal of Financial Planning include articles which address and extend the work on rising equity glidepaths during retirement, which Michael Kitces and I published in the January 2014 issue. Admittedly, the March one…