Post #15 – Managing your Investments in a Bear Market
This post will discuss an investment principle that is both simple to understand and easy to implement, the practice of “Re-balancing.” Re-balancing is a concept that many of you may already be familiar with. But I think it is one of the most important investment management principles you can follow, especially in a long term bear market as we are currently experiencing.
Post #14 – Equity Allocation – Some Final Comments
In my previous post, post #13, I suggested a couple ways to decide on your appropriate asset allocation. But, what should a person do if the average annual return, indicated by the suitable equity allocation, will not provide the long term results necessary to retire? This is a situation that, undoubtedly, applies to many people in the 50 to 70 age range.
Post #13 – The Importance of Equity Allocation, Part III
In Post #12, I discussed the importance of managing your investing emotions through maintaining your portfolios volatility. This is done by deciding on the appropriate percentage equity allocation. Deciding on the proper asset allocation is a very important decision for every investor. It is also a personal decision as each person’s risk tolerance is different. In this post I will provide a couple of suggestions as to how you might make this decision. I have included the table from Post #12 for you to consider once again.
Post #12 – The Importance of Equity Allocation, Part II
In my last Post, “Post #11 – The Importance of Asset Allocation, Part I,” I make the point that the percentage equity allocation of your portfolio is the major determinant of its long term returns. I’m sure many of you are probably thinking “Great, next he’ll be telling us the world is round!” But my previous post is just a prerequisite to the more important discussion about equity allocation and managing risk in the post you are reading now. Frankly, this is one of the more important posts I will write.
Post #11 – The Importance of Equity Allocation, Part I
The single most important concept in investment planning is asset allocation. At its most basic level, asset allocation is deciding how to apportion your portfolio between equity assets and fixed income assets. This is a fundamental decision every investor must make. Asset allocation is important because, on a long term basis, it affects both your average annual return and the risk you must take to obtain the average return.
Post #10 – First Rule of Investment Planning
Based on what I see in the media concerning stocks and other investments, it’s not surprising that some who have an interest in investing for retirement may get so bewildered that they just want to give up. I sympathize with these people. All the media outlets offering confusing and conflicting investment advice can be daunting, and no doubt cause a lot of anxiety for the average retail investor. But I have the solution for you. My first rule of investment planning is to ignore all the financial media outlets. In fact, ignore everything that comes out of Wall Street.
Post #9 – Retirement Savings – Staying on Track
I thought it might be helpful to provide one more post on retirement savings before moving on to investment concepts and strategies. In Post #7 I provided a simple 4-step process on how to estimate the size of your future retirement nest egg. In Post #8 I included a table for determining what your annual savings rate should be. Over time it is important that you track your progress towards your retirement goals. The following simple table will help gauge how well your retirement savings is on track.
Post #8 – Retirement Planning Simplified, Part II
This blog post will provide a simple guideline to estimating what your personal annual savings rate should be in order to reach your retirement nest egg goal. This post is a follow-on discussion of the 4-step process I discussed in my last post, Post #7. If you have not done so already, you should read Post #7 before reading this post.
Post #7 – Retirement Planning Simplified, Part I
For those of you who would like a simple method to quickly estimate the amount of assets necessary to fund your retirement, and how much you need to save annually, the next couple blog posts are for you. The essence of retirement planning simplified. This post will provide a 4-step process that can be used to estimate a ball-park retirement nest egg figure to fund a 30-year retirement. This method is for those people who, whatever their age, are just starting a serious retirement savings plan and at this point need a rough target figure. This 4-step process will only provide a rough figure because it requires a lot of assumptions about the future that may not yet be known. The retirement lifestyle you hope to live, the future inflation rate, and future market returns, etc. are variables that will affect your final nest egg size. As you get closer to your retirement date, you should work with a financial planner to help you apply more rigor to the process I have presented here. The 4 steps are:
Post #6 – What can you expect from Social Security and Medicare? Part II
I have done a lot of reading and talked to many professional financial planners about what changes may be coming to federal old age entitlement programs as well as private pensions and state government retirement programs. I will provide the general thinking by experts on what may lay ahead for the old age entitlements and how you should allow for them in your retirement planning. These views are not my own but a summary of the perspective of several financial planning and policy experts with no agenda other than trying to predict the changes to these entitlement programs and how they might impact peoples’ retirements.