Tag Archives: David Stockman

Late Summer Doldrums

The late summer doldrums picked up straight away after our last post and drive to be more diligent here. Who knows what the driving factor has been, but it has been a busy time. Still, that’s no excuse for leaving you in the lurch with respect to finding great guidance for your retirement planning.

Late Summer Doldrums: Will it ever end?
Perhaps the day the doomsayers predict is getting closer, perhaps not. The bull run has been epic, certainly in our lifetimes. That has to end, right? So, what is different this time? The global, ongoing central bank campaign to flood markets with cheap money is one thing. More than just low rates, there was the extended Fed intervention in markets driving up the Fed balance sheet. Plus, many individual investors have migrated to index funds … putting incessant upward pressure on indices. As the Fed contemplates raising rates (tightening money) and selling assets (adding supply) and consumer migration tapers, the end of the run could be precipitous. David Stockman warns the market’s “Chuck Prince moment” has arrived…”only more dangerous” The Rise of Robots & the Risk to Passive

Late Summer Doldrums: Why worry?
You may be thinking “why worry? The markets have been great to me.” That may be, even in comparison to where you were in 2007. Then again, can you afford a correction like you saw in 2008/2009? Remember the notion of sequencing risk, retiring into a downturn is the worst-case scenario. Plus, the older you get, the less time you have to recover your ‘paper losses.’ Diversification remains your best friend at this point, with countercyclical components there to help when markets do turn. Just remember, your retirement will be long (longer than you think, hopefully) and come with surprises. 5 Retirement Expenses You’re Probably Not Ready For $500,000 Surprise: Health Care Sticker Shock Awaits You in Retirement

Late Summer Doldrums: What can/should you do?
For starters, don’t fret about any of those things. Control the controllable items and be aware of the rest. Start by ensuring your portfolio is properly diversified. The good news is that seemingly all asset classes have benefited from the long rally (oil & gas being the glaring exception). Still, you may need to do some rebalancing to get your portfolio back in shape. Here is an interesting take on total returns that is worth considering. Need More Income: Seek Total Return Here’s How to Determine Your Ideal Asset Allocation Strategy (caveat: no mention of alternative asset classes or even commodities that may provide a hedge)

Retirement Special

Better to trust the man who is frequently in error than the one who is never in doubt.” — Eric Sevareid, journalist

Your retirement, own it:
This is a really simple concept that I think escapes many, but now you can adopt this approach, too. Treat Personal Finance Like a Business So You Can Retire Early
We have covered volatility before, but it has such a short history, it is hard to decipher. Here is a look at the largest moves in VIX, with an eye to finding trends. VIX Trips from 37 to 20 Have Been All-or-Nothing for Stocks
At the risk of seeming self-serving, having spent so long in the annuity space, this is an interesting article on using annuities for income in retirement … in bankrate.com, of all places. Annuity Strategy to Keep Income Flowing

Economy and the Market – a continuing look at the wide array of perspectives:
A fascinating walk through the charts behind the greatest thinkers on Wall Street. Take a few minutes to get some great insight … free. Wall Street’s brightest minds reveal the most important charts in the world
The China saga and its related implications for the US and global economies continues. China Officially Sold a Quarter Trillion Treasuries in the Past Year (Unofficially Much More) and What This Means
Then, there is the Fed, and Ben Bernake recently saying that negative interest would not be a bad idea. Dollar Moves Shake the World: “Federal Reserve Could Start a Currency War”
Whatever the driving force, commentary is building on the notion of a global slowdown. Here is an interesting amalgam of some of the best known names in the ring. Why Are the IMF, the UN, the BIS, and Citi all Warning that an Economic Crisis Could be Imminent?
While you may not like David Stockman, this is a pretty decent walk through the facts around the global central bank interventionist policies and the seemingly undeniable result. The Central Bankers’ Death Wish
Simply because it is out there, and lends some credence to the thesis that the Fed is less anchored in reality than we might like. “They Just Don’t Want a Job” – The Fed’s Grotesque “Explanation” Why 94.6 Million are Out of the Labor Force

Miscellany – perhaps all that market turmoil is making people crazier still:
I think everyone can be better at this, here is another way to try improving your security. Create Complex Passwords You’ll Always Remember with Poetry
Whether you are too far from a Costco, or simply that thrifty, this is a good article. Get Costco Prices without the Membership Fee at These Price Matching Stores
Another fascinating, positive byproduct of the drought. Mexican church reappears nearly 50 years after being submerged