Category Archives: Investing

Summer Doldrums

Seems we have been stuck in something like the Summer Doldrums the past several weeks. Whether that is suboptimal weather, the ongoing mayhem in DC, or the occasional heat wave, I cannot say for certain. Nonetheless, life moves on and so does the need for diligence in your retirement planning regimen. So, we return to the primary topic at hand today with a vengeance: your retirement.

Summer Doldrums: The eye-opener section
Having taken a hiatus of nearly a month, it seems appropriate to start by jerking everyone back to reality. Yes, markets have managed to stay buoyant, but still ….
You should probably consider things that may conspire to trip up your retirement. The first – we’ve called sequence risk here before – is one you must take to heart. 27 Ugly Truths About Retirement
Then there is the matter of the never-ending bull market. Are you still ‘all in?’ Have you taken defensive measures to lock in some of your gains? This lengthy tome may help you put things into perspective. There They Go Again … Again from Howard Marks at Oaktree Capital Management

Summer Doldrums: How about some actionable ideas to consider for your retirement?
We often emphasize risk adjusted total returns when thinking about investing for retirement. That frequently turns into dividend aristocrats as an option. They drive current income and, hopefully, capital appreciation. Combined they are often a winning element of your strategy. Undervalued Aristocrats: Exclusive Dividend Aristocrat Buy and Sell Recommendations From Sure Dividend Ignore the Price, Remember the Dividends: Why Dividends are the Key to Building Wealth
At the same time, it often pays to capitalize on macroeconomic trends. In this case the convergence of a demographic trend and a political reality. A Private Pay Healthcare REIT That Yields 10%

Summer Doldrums: How can you bring about behavioral change?
Since we just missed a month of posting, how do you change behavior? A Stanford University Psychologist’s elegant three-step method for creating new habits

Dividend Defense

Markets remain a perplexing, challenging read and a dividend defense may not be the worst approach.  The first thing you need to do is understand the environment. Whether you are in the accumulation phase or the distribution phase, dividend defense may be a good approach.

Dividend Defense: What are the risks you face today and how can you protect against them?
As you plan your retirement you have to be wary of myriad risks, and reliable dividend stocks can be a good way to insulate your portfolio through the cycles.
Let’s start by assessing the risks that can derail your retirement plan. 7 Dangers that Could Derail Your Retirement (and What to Do About Them) and 5 Silent Killers of a Financial Plan
Then, of course, there’s the truly defensive way of thinking. Seems like we have been waiting forever for the ‘other shoe to drop.’ It really has been a long run up since the debacle that was 2008/2009. Will it go on forever? Unlikely. Retirement Strategy: Do You Have What it Takes for the Next Major Correction? or Positioning a Portfolio Properly for Any Outcome
A quick word of caution: all signs point to passive investing as the way to go. Indeed this week Warren Buffett essentially endorsed the model saying: “ “ Two ways of looking at this, if markets are going to correct, indices go with them and how much of the market rise comes from the move to indexed products? Indexing Investment Strategy Becoming Increasingly More Risky? Not to mention, Monday Morning Memo: Is Capacity a New Restriction for the ETF Industry?

Dividend Defense: Using dividend stars to deliver returns or income and preserve capital
All too often we focus solely on the income aspects of dividend stocks. They are a great way to deliver income and preserve capital in the distribution phase. They are also a decent way to deliver returns and build basis in the accumulation phase. Regardless how you plan to utilize your dividend investments, fundamentally sound selection is the key. 15 Straight Dividend Hikes, Raised Guidance Again, Major Earnings Growth, 12% Upside or 10 Champion Dividend Dogs Said to Gain 7% – 22% by May 2018 or Dividend ETF to Retire On

Dividend Defense: Evolving political landscape aims to make self-determination easier.
No matter your opinion on where markets are heading or dividends as a tool, this is a good idea. TIAA, IRI Back Bill Requiring Retirement Plan Income Projections

Luck of the Irish

Happy St. Patrick’s Day, a day when the Luck of the Irish becomes topic for barroom discussion. One thing we all know is that a successful retirement has very little to do with luck. Beyond the possible sequence of return risk luck – good or bad – your retirement hinges far more on the effort you put into planning.

Luck of the Irish: Understand the environment in which you are investing.
Even the best plans need course correction, and understanding the environment is always a good place to start. Yes, retirement saving is long horizon, still there is room for prudence in where you invest new money. How is the economy doing? Do markets match up with macroeconomic reality? Is the Economy Doing Well?

Luck of the Irish: Leverage a combination of savings tools.
The foremost saving tool to leverage: compounding. That’s right, you do not need a government program to effectively save for retirement. You need to start early and be consistent in your saving habit. The power of compounding will repay you in spades. The Power of Compounding: A Patience Game (note that he points out the need to stay aware of the environment here)
While this comes at it from a different angle, the employer’s, it illustrates the power of the HSA. This tool is the Swiss Army Knife of saving, looking to become more powerful in Republican circles. What Clients Need to Tell Employees About HSAs

Luck of the Irish: Remain calm.
Understanding compounding, being diligent and consistent in investing you will accumulate a nice sum of money. Markets do have downturns and the key is not to panic. This article helps put this into better perspective for you. Early in the Accumulation Stage, Price Risk Can Look a Lot Different

Luck of the Irish: Focus on income in the distribution phase.
Once you retire the key is to transition your thinking to distribution of money from your savings. The distribution phase is largely about income, yet preserving principal is not a bad thing. You have the difficult balancing act of greater longevity and theoretically capped principal. That’s why we often highlight good dividend approaches and annuities as tools. Here’s an ‘income menu’ that could help retirees make their savings last Dividends Pile Up with This High-Yield Dividend ETF With Rising Rates Ahead, Stick with High-Quality Dividend Growers The right way to get the retirement income you need 4 Overlooked Tax Breaks for Retirees

Retirement Insecurity

Finally, something we can all agree on: retirement insecurity. Perhaps through persistence or saturation or simply self-awareness people are coming around to the unnerving truth. Whether driven by slow starts, low balances, Social Security, longevity risk, medical costs or something else, people are concerned. Democrats and Republicans Alike Worry About Retirement Security
Just in case you think that is all overblown, the Congressional Budget Office just released this study on Social Security. Social Security ‘broke’ by 2029: What’s not in it for you?

Retirement Insecurity: Don’t just sit there, do something about it!
We have talked many times about the QLAC (Qualified Lifetime Annuity Contract) and the potentially vital role it can play. These Government authorized ‘longevity insurance’ annuities provide you income for life within your qualified plans … when plan sponsors provide them. Seems that may be getting some traction now. Employers are trying to solve their workers’ retirement income problem It doesn’t hurt to bring it up with your employer.
We say it here virtually every installment, use all the tax advantaged tools you can when saving for retirement. Just in case you missed that, there’s this. 6 Tax-Efficient Strategies to Keep More of Your Money in Retirement

Retirement Insecurity: Save more while you are working and be smart about it.
I admit I have not heard of this before, but it is very, very interesting. If you are still working it is worth the time. Another way to measure retirement readiness: Your ‘Power Percentage’
Like most people you likely do not know how much you need to retire. There are plenty of guides, most pretty well useless. This may be, too, but it is great food for thought and might just get you motivated. The 25X Rule to Early Retirement
If you happen to subscribe to the Financial Times this might be interesting reading. If not, it says that looking through US regulatory filings shows that the most successful investors have one thing in common. They all disregard macro trends in favor of betting on individual companies and industries. You might say ‘so what’ I’m not going to do that, but wait then there is this article. Here if you are willing to invest the effort you may well join that club by doing some really interesting analytics on individual stocks, ETFs and more. If nothing else do yourself a favor and read the beginning. The Schwab US Equity Dividend ETF vs. the S&P 500 Index: A Comparative Case Study

Retirement Insecurity: Change your mind set in retirement – distribution not accumulation.
In the perfect world, you manage to get appreciation of your assets and income. That’s where dividend stocks can be helpful by throwing off income without liquidating assets. It is a fluid environment, though, and you should stay on top of your choices. Dividend Champions for March 2017
In case you have not yet figured it out, longevity risk is a giant one for your retirement. That means dealing with it explicitly is a priority. In turn that means you may need to think outside the box on how to address this risk. Life Insurance in Retirement: Who Needs It?

Optimizing Trump

We have turned our focus back to your retirement and plenty of disgruntled people out there will be well served by Optimizing Trump. What that means is identifying the potential implications of a Trump presidency for your retirement and addressing them now.

Optimizing Trump: Locking in things as best you can before it gets any crazier.
One of our common themes is income generation in retirement. Whether using tools like longevity annuities or investing in the finest dividend stocks, securing income streams matters.
Plenty of dividend stocks and funds, and plenty of tips on them, too. This one is intriguing, though. One of the Best Dividend Growth Stocks Around Regardless of the State of the Economy
This is way, way in the weeds for most, but it portends something worth understanding. The bottom line is that the Fed bought up lots of stuff in propping up the economy. Now, they are thinking about exiting some, specifically mortgage backed securities. It is good to be aware, at least. Everyone is suddenly worried about this U.S. mortgage-bond whale

Optimizing Trump: Finding weaknesses before they overwhelm.
Safe to say whether you like Trump or not, you probably expect there will be turmoil at some point. Turmoil equals uncertainty, and uncertainty drives volatility. If Trump Flares Up Uncertainty, Profit from These ETFs

Optimizing Trump: always focus on the fundamentals … fees, longevity, etc.
It has been some time since we have harped on the fact that you will live longer and that means you will need more savings. Perhaps the oracle of The USA Today will lend some credence to the argument. How much do you need to fund retirement? More than you think.
Now a somewhat different angle on the same topic…your spouse is likely not the same age. That matters. Retirement Planning? Couples, Mind the Age Gap

Refocus on Retirement

It always seems to be the best advice to focus on what you can control; right now that means Refocus on Retirement. As satisfying as a snarky Facebook post or march to Trump Tower may be, it will not improve your life. Getting your retirement strategy straight and working on your retirement account and assets, that will matter. Indeed, with only so many hours in the day, you are far better served by getting your retirement in order. You might find value in spending time with your loved ones after that. To this end, we return to our core value proposition here, delivering insightful reading on retirement topics.

Refocus on Retirement: Navigate a challenging environment
With equity markets on an extended tear, one must wonder when it ends. Market timers never prosper, but vigilance is very much in order.
As ETFs have prospered many have shifted from active strategies to passive. Is that still a good idea? When markets correct what happens to indices? What drove the performance in the first place? What if Everybody Became an Indexer? Financial Advisor Daily Digest US ETF Industry Growth Shows Signs of Maturity
Be prepared for a downturn by repositioning assets as needed. No magic, just an open mind: How to survive a ‘worst-case’
The uncertainty driven by the Trump Administration has generally worked favorably for US markets. Will that continue, or should you seek shelter now? Emerging-Market ETF Strength is More than Meets the Eye
In the same vein, volatility may be a decent play as the Administration finds its footing. Market Volatility Bulletin: VIX Back in Bed?

Refocus on Retirement: As always, find ways to optimize your retirement income
One obvious way to optimize your retirement income is though income generating investments. This REIT Yields 7.4% and Could Return Over 50%
Stay current in your awareness of dividend stocks. Dividend Champions for February 2017
Another great way to improve your retirement is leveraging the tax code. Retirement: Use extra cash to cover retiree health costs

Refocus on Retirement: As promised, your getaway section for this post
A getaway may simply be in your mind. Try these on for size, it won’t take long. 25 Shortest Jokes Ever
Here is a classic case of careful what you wish for … look at the budget numbers! Still, worth a side trip, at least. The world’s first “acoustically perfect” concert hall opens in Germany
Since we advocate saving money and traveling (well). These sites might help. The Checking Accounts That Let You Avoid Foreign ATM Fees The 12 Best Travel Sites and Apps You Need Right Now 

Year-end Review

Most everyone is taking this week off from work, the perfect chance for a year-end review.

Year-end Review: Tune up your fiscal habits as we enter the New Year.
It is always good to start with the basics. Here you can check your progress and fine tune your approach. 2 Financial Resolutions You Really Need to Make Before the New Year
In a similar vein, but a longer to-do list, this has you checking fees and automatic savings. 9 Smart Money Moves to Make in January
While this may not be a year-end specific thing, you are not getting any younger. So, in the spirit of checklists, here is one for the must do pile. 5 Financial Steps You Should Take Before You Retire

Year-end Review: Do you think you are AOK on retirement savings?
If you have been reading along with each post you likely realize there is still work to be done. If that has not gotten through, or you have not been reading along, try this. My friend Ron Pressman gives a compelling, fact-based analysis of the US retirement situation. Please do have a look. The Retirement Savings Deficit in America

Year-end Review: Inasmuch as it is a week away for most, enjoy some diversionary things.
Who would not want to stay in the most beautiful places in the world? You may as well put some of these in your budget, while you are at it. The Most Beautiful Places to Stay in the World
Of course it did not end well for the old Czar, but boy did they live the high life. This one is really a flip through some unbelievable pictures. Life Aboard the Luxury Super Yacht of Russia’s Last Emperor
Google is full of surprises, and Google Earth and Google Maps are no exception. If you use them, you may be interested in these articles. Google Maps: 14 Hidden Features You Probably Didn’t Know Google Earth now has global Landsat and Sentinal 2 data from 1985 to 2016 and Google Earth Update Shows How Climate Change Has Morphed Our Planet

Successful Retirement

Just what is a successful retirement? Perhaps not having to work after you ‘retire’ is how you define it. More likely you are thinking about traveling, time with family, remaining healthy and active…good things. Fact is you should probably avoid the first thing before you focus on the others. Now, you may want to work in retirement, that’s fine. You may call it a ‘second act.’ Maybe you can truly devote your time and energy to a cause you support, or flip properties; more power to you. I think you can do everything right in your run up to retirement: saving more than you think you need right from the start, watching fees, being aggressive enough, etc. If you get the income side of the equation wrong, though, it can blow it all. This brings us back to a few recurring themes: longevity, expenses and withdrawal rates.

Successful Retirement: Just what do you need to do right to make it happen?
This author has put a lot of thought and effort into the right withdrawal rate. Fact is that longevity, fees and investment strategy are all important determinants. If you retire at 65, will you be retired for 40 years? For many of you, yes. That makes this article a must read. It is also a huge eye-opener (sorry). A ‘Safe’ Withdrawal Rate Highly Depends on Longevity and Asset Allocation
These may be repeats, but warrant repeating. The notion that a flat withdrawal rate will match reality is hard to fathom. This construct makes a lot more sense. You will slow down as you age, right? Then the medical bills will likely ramp up later, right? What is the ‘Retirement Spending Smile?’ and Retirement Spending Increases and Decreases Over Time
I really try not to annoy you with hard to read articles. This one makes some good points, but you have a short time to read it. So, keep reloading the page and work your way down. How Much Money Do You Need to Retire?
One thing is certain, your cost structure in retirement will matter. One way to effect that is moving to a lower cost of living. The 50 Cheapest Places to Retire in the US (I suspect my many NJ friends may not have considered Newark!)

Successful Retirement: As suggested above, it is not all about money. Keep your mind active.
And you thought it was a bunch of books. These 250-Plus Violins are About to be Owned by the US Government
Lots of you will make your way to NY City during the holidays. Maybe this is an interesting aside. Secrets of New York’s Grand Central Terminal (remember when that ceiling was black?)
You know this technology will make its way to your phone before too long. I can sure use it! NASA’s New Camera Is Straight from the Future with Incredibly Detailed Footage
This one is a warning that it is not that simple. Climate change is a controversial subject, and it takes more work than you think to understand. How did one volcano confuse scientists, ocean research?

Holiday Push

With Thanksgiving behind us we are into the Holiday Push. Hopefully you are closing deals at work. Holiday shopping is in full swing. You simply do not have time for this retirement stuff. Our regular readers know there is no time like the present to enhance your retirement. With the incoming Trump administration caution is likely the best watchword.

Holiday Push: Always keep doing the right things.
Doing the right things always start with watch your fees. How an extra 1pc investment fee will cost you 16 years of retirement income (don’t be fooled by the UK spin here, the math is the same!)
If you are a small business owner, a large business decision maker, or an employee interested in helping yourself and your fellow employees, consider this. Get Your 401(k) Fees Down Because Your Employees Deserve Better
In the spirit of the season, I’ll give you a contrarian position on fees, too … that is, sometimes active managers actually do earn their fees. Royce Special Equity Fund Earning It’s Fees
If you are in the income phase – retired already – then be sure you are generating income. You will find some interesting thoughts on that in these pieces: Despite Mistakes, a Dividend Growth Investor Retires Early, Part 1 Despite Mistakes, a Dividend Growth Investor Retires Early, Part 2 Good Grief, Don’t Jump Off This Dividend Machine High-Dividend Stock Yields 9%, Pays Monthly, 4 Dividend Hikes in 2016, More in 2017
This one is really interesting, if for no other reason than to understand how convoluted the oil and gas industry has become. Sunoco LP: a 15.2% Yield with Significant Upside

Holiday Push: In December we will ease off retirement focus and give you other valuable leads.
Stay alert, particularly during the holidays, to nefarious doings on your phone. What is spyware? How secret programs can see into your iPhone and record your calls
About that Taiwan phone call … what’s up? Donald Trump is aggressively provoking China. What is he thinking?
Do you realize that yesterday a milestone anniversary passed quietly by your door? Is it time to revisit the thinking behind the words? 20 Years Later, Greenspan’s “Irrational Exuberance” Has Become Even More Irrational

Retirement Status

With the election just behind us and year-end just ahead it is time to seriously consider your retirement status. Why not start with a behavioral check-up: are you doing the right things and enough of them? Follow that with a quick look at what a Trump administration might mean for your savings. If that scares you away – or the election did – by all means save money on your international flights!

Retirement Status: No time like the present to have a close look
First and foremost, don’t be overconfident. Americans have a dismal track record on saving for retirement. Do yourself a favor and stay on it.  Think you’re prepared for retirement? Answer these six questions.
We often focus on longevity here, a corollary to that is aggressiveness. Since you will be retired for a long time, you need to invest appropriately. The old rules may not apply. 60% of Americans Invest Too Conservatively for Retirement, Study Shows
Always be looking for good tips. 3 Fantastic Retirement Tips and Tricks
Then, of course, we really do not know what a Trump Presidency will bring. So, be cautious and look for opportunities. How Trump Could Change the Retirement Landscape An Unexpected $12 Trillion Hole Emerges in Donald Trump’s Plan to “Make America Great Again”

Retirement Status: Tips if you plan to leave the US now (Kanye, Miley, Whoopi, etc.)
You may as well leave on the cheap, and I have come across a whole lot of good ideas on how. Revealed, the Secret Travel Tips that Airlines Don’t Want You to Know
Here is Why Using Google Flight Track Can Save You Serious Money
Never book flights on Fridays – and eight other tips for getting cheap airfares
I’ve Accidentally Discovered a Way to Save up to 75% on American Tickets