Personally, I have had only one minor administrative error recently with Vanguard where they incorrectly deposited SEP-IRA money into my traditional IRA. I called them to explain their error, they pulled up the letter of instruction, recognized their mistake and made the correction. Problem solved. With record inflows of more than $1 billion per day in 2017, or $369.3 billion, some investors are wondering if Vanguard’s success is a problem. I don’t think that’s the case. In a transaction oriented business there are always going to be mistakes. They can be corrected. When I worked at … [Read more...]
How Many “Retirees” Will Keep Working?: Part IV
When Laura Sexton retired as a senior chief hospital corpsman in the US Navy, she applied her Navy skills to her new job: Lead ski-run groomer and snowcat operator at Deer Valley Ski Resort in Park City. According to Sexton,” writes Nancy L. Anderson in Forbes “the Navy uses a three-step approach to learning anything that could serve us all well: See it, Do it, Teach someone else. First, you physically observe how to complete a task as it is explained (see). Second, you perform the task (do). Then, show someone else how to do it (teach).” The article continues: Many people want to (or need … [Read more...]
Trees don’t Grow to the Sky
Why I’m Buying Vanguard GNMA
You always need to study your downside protection and do what’s difficult to do. Recently, I added half of my 2017 SEP-IRA contribution to Vanguard GNMA—a sizable addition to my overall GNMA position. I didn’t do it because I feel like I can predict where interest rates are headed. Who can? It’s all fine and good when the talking heads spout off about three or four rate increases this year and more to come next year, but in reality their advice doesn’t cost them a penny. If they’re wrong and the market crashes, like it did twice already this century, will they be there for you, or me for … [Read more...]
RAGE Gauge: March Full of Risk
Perhaps the second best gun salesman behind Obama is former Supreme Court Justice John Paul Stevens. While Mr. Stevens is calling for the repeal of the Second Amendment, real Americans are trying to figure out how to protect their family and their constitutional rights. Don’t delay in making sure your family and your portfolio are secure. My March Rage Gauge indicator continues to signal that risk is a four letter word that many are failing to pay attention to. … [Read more...]
Ignore Bonds (at Your Peril) and Be Average, Like the Next Guy
Originally posted November 1, 2017. A phrase I often hear from prospective clients is, “I don’t understand bonds, but I know I need them, and that’s one of the reasons I’m talking with you.” There’s a lot of wisdom in that phrase. It’s like saying to your dentist, “I don’t understand root canals, but my tooth is killing me and I know I need one, and that’s the reason I’m sitting in this chair.” Knowing what we need is different from understanding how to do it. When I think back to when I first joined Dick Young’s management firm in 1998, he had a huge following of investors seeking … [Read more...]
Vanguard GNMA: There When You Need It
Yesterday the S&P 500 fell by 2.5%. At the same time, the Vanguard GNMA Index fund was up 0.2%. Having powerful counterbalancing bond funds like Vanguard GNMA in your portfolio can prevent you from taking massive hits to your wealth. … [Read more...]
Dangerous Rules Make American Pensions Riskier
Originally posted on August 22, 2016. The abuse of expected returns assumptions at public pension funds in America is something I have regularly raised a red flag about. Take a look here at The Economist's comparison of American public pension fund rules with those for private funds and foreign public funds. The opportunity to use inflated future return expectations leads public pensions in America to make less than realistic assumptions about future liabilities, thereby threatening the system itself by making risk more attractive than it should be. Private-sector pension funds in America … [Read more...]
How Many “Retirees” Will Keep Working?: Part III
In my series this week about retirees working through retirement I told you first that 79% of retirees expect to keep working in retirement, but many find out that they cannot. Then I told you that 73% of Americans 50 and over are planning to delay retirement altogether. Now I'm turning the focus away from America's Baby Boomers, previously the nation's largest generation, to Millennials who are now America's largest generational cohort. Millennials are people born between 1981 and 1991 (though definitions vary). They are well educated, but thanks to a variety of factors, they are getting a … [Read more...]
How Many “Retirees” Will Keep Working?: Part II
Of Americans aged 50 and over who are still working, 31% haven't even prepared a retirement budget. Of that same group 73% prepare to delay retirement according to a survey performed by the NHP Foundation. Many of the people in this group, encompassing many Baby Boomers but also some older Gen-Xers, are wishful thinking. Lee Barney writes for Plan Adviser: Thirty-one percent haven’t prepared a retirement budget. Among those that have tried to figure out a retirement budget, 62% say that Social Security will comprise half or more of their monthly income. Sixty-five percent have not budgeted … [Read more...]
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