It’s pointless to try to figure out how much you’ll need in [retirement] savings or income if you don’t have a good understanding of how much it costs
for you to live. Ben Carlson
CHART OF THE DAY
RETIREMENT FINANCE AND PLANNING
Time for Retirement ‘Selfies’? Robert C. Merton MIT. …neither governments nor companies are
willing to bear the liabilities associated with pension obligations. This shift
requires new thinking about how portfolios are managed and which instruments
are available to investors. Our proposed SeLFIES (Standard of Living indexed,
Forward-starting, Income-only Securities) make individuals self-reliant and are
also advantageous for governments.
How Much Money Do You Need to Retire? Ben Carlson. It’s pointless to try to figure out how much
you’ll need in savings or income if you don’t have a good understanding of how
much it costs for you to live…You can run through all the calculations and
spreadsheets you want but life will inevitably throw you a curve ball or some
of your assumptions will prove to be untrue. This is an unfortunate side effect
of trying to plan in the face of never-ending uncertainty. In a way, there’s a
lot of guessing involved in the process.
MARKETS AND INVESTING
Building a Better Deep Value Portfolio: DifficultiesMastered are Opportunities Won, AQR. Many
investors would like to add an opportunistic contrarian component to their
portfolios, but face challenges in doing so. Pre-allocating to a dedicated
“deep value” strategy which incorporates discretionary oversight in a
systematic framework may be one solution that helps harness the profits from
opportunistic trading in a way that diversifies existing portfolios.
Gundlach: Expect Lower Inflation. Advisor Perspectives.
Why It’s Always & Never Different This Time, Ben
Carlson. Whatever happens, it would be
prudent for investors to plan on lower future returns than the history books
show.
Did Declining Rates Actually Matter? NewFound. Coupon yield had 3x the influence on total
return over the last 30 years than changes in rates did. … when it comes to
fixed income, your current yield will be a much better predictor of returns
than trying to guess about changing rates.
The (Un-)Importance Of Returns. Alpha Architect On balance,
I’ve found that the demand for higher returns generally increases with the
magnitude of wealth.This is due to two primary factors: 1) an increased
capacity to assume risk and 2) an increased capability to invest for the
ultra-long term.
ALTERNATIVE RISK
Hedge Fund Strife Gives Rich Families New Swagger With Managers, Bloomberg. Turmoil in the fund industry is giving family offices a
resurgence in power. As traditional institutional backers reconsider their
hedge fund investments amid sluggish returns, those who manage money for the
rich are gaining flexibility on fees, customized investments and more access to
high-profile portfolio managers.
Trend following and the headwinds of rising yields,
sr-sv.com. …some strategies have
naturally been fitted to or biased by a facet of the historical data that may
not be present in the future… Although, in general, anyone who has swam in the
sea knows how difficult it is to swim against the tide, and this, to some
extent, is to be the challenge for trend-following CTA and global macro
managers and their investors going forward. Perhaps, even more of a challenge
is to ensure that managers that have previously provided downside protection
will do so in the event of a raising rate environment.
Managed Futures & Dealing With Uncorrelated Assets, Ben
Carlson.
Benefits Of Alternative Lending, Swedroe at ETF.com
New Sources Of Risk & Returns Build Better Portfolios.
Swedroe at ETF.com
Yale Endowment Blasts Low-Fee Critics, Says Gains Would Lag,
Bloomberg. “What Buffett, Gladwell and
other fee bashers miss is that the important metric is net returns, not gross
fees,’’ the report said. “Weak or negative returns would result in low or no
performance-related fees, but would be a terrible outcome for the university.’’
SOCIETY AND CAPITAL
Interview with Angus Deaton on Death Rates, Inequality, andMore, Timothy Taylor. People often think
the health system is responsible for our health. In this case, the health
system is responsible for killing people, not actually helping them. ... It’s
like there are two Americas
out there: the people with a B.A., and people without a B.A.
23 things artificially intelligent computers can dobetter/faster/cheaper than you can, Seth Godin.
The question each of us has to ask is simple (but difficult): What can I
become quite good at that's really difficult for a computer to do one day soon?
How can I become so resilient, so human and such a linchpin that shifts in
technology won't be able to catch up?
Bad Debt Is Bad for Your Health, Atlanta
Fed. In a recent working paper, we
demonstrate a potential causal link between these fluctuations in delinquency
and mortality. (A recent Atlanta Fed podcast episode also discussed our
findings.) By isolating unanticipated variations in debt and delinquency not
caused by worsening health, we show that carrying debt—and delinquent debt in
particular—has an adverse effect on mortality rates.
The U.S.Spends More Public Money on Healthcare Than Swedenor Canada.
TheVisualCapitalist.
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