The Safest Investment May Not Create the Safest Retirement
Most of the decisions we make in retirement planning become easier once you understand why you are making them, but that does not mean they always feel intuitive. Investing is a good example. You spend your working years accumulating savings, often with the understanding that accepting some market risk is necessary to grow your money. […]
The Tradeoffs of Protecting Your Purchasing Power
Every generation has stories about how inexpensive things used to be. A gallon of milk, a tank of gas, a movie ticket, or the first home someone bought decades ago all seem impossibly cheap by today’s standards. A dollar simply does not buy what it used to. That may seem like little more than an […]
Your Age Is an Imperfect Guide to Investment Risk
A restaurant can be packed every night and still struggle financially. Knowing how much revenue comes through the door tells you something, but not nearly enough. You also need to know what it costs to operate and what obligations must be paid. Retirement portfolios deserve the same treatment. An account balance, or the age of […]
What Investors Should Know About IPOs
A successful restaurant rarely opens its doors on the first day with every table filled and every reservation booked for the next six months. Even the best restaurants spend years refining their menu, building a reputation, and proving they deserve a loyal customer base. Investors, however, often expect newly public companies to justify valuations that […]
The Real Cost of a Roth Conversion
Few retirement planning topics generate more debate than Roth conversions. Some view them as one of the most powerful tax planning opportunities available. Others argue they’re frequently oversold, causing retirees to pay taxes years before they need to. Both perspectives have merit, but the problem is that they often focus on the wrong question. Many conversations begin by […]
Should Your Retirement Spending Rise and Fall with the Market?
Most retirement income strategies assume spending will remain relatively stable over time. You retire, determine a sustainable withdrawal amount, and then spend roughly that amount for the rest of your life, perhaps adjusting for inflation along the way. That assumption is so common that it often goes unquestioned. Yet there are retirement income strategies built on a very different idea. Rather than trying […]
The Biggest Inflation Mistake Retirees Make
Stocks are often described as one of the best long-term hedges against inflation. While that statement is generally correct, it can contribute to more retirement planning mistakes than most people realize. The issue is not that stocks fail to outpace inflation over long periods, but that many retirement plans often assume inflation has been addressed simply […]
Why Own Hundreds of Stocks Instead of One Fund?
Most investors are familiar with the logic behind index investing. Rather than trying to pick winning stocks, they buy a fund that owns hundreds of companies and allow diversification to do the work. The approach is simple, inexpensive, and has proven difficult to beat over long periods of time. Direct indexing starts with a seemingly […]
Home Sweet Home Bias: Overweighting US Stocks in Your Portfolio
Investing is deceptively simple. Until it’s not. As investors, we want to start with the market portfolio—that is, by definition, the most efficient portfolio. But we’ll also want to customize our investments to address our specific situation. For instance, the global bond market is substantially bigger than the global stock market, but most retirement-focused investors’ […]
Are Stocks Safer in the Long-Term?
When you’re investing, you need to focus on the long-term. This is one of those pieces of received wisdom that everyone has heard, but it’s often wildly misinterpreted. There’s an idea that stocks get safer the longer you hold onto them because you can ride out the bad periods if you are disciplined enough – it’s just a matter of sticking around until the market rewards you for being a “good investor.” To put it simply, this is not the case.
