Desperately Seeking Yield Investors are perplexed and concerned about continued low interest rates. People who think of themselves as conservative investors like to rely on guaranteed fixed interest rates. Over the last six years that hasn’t been much fun. In early 2009, the Federal Reserve Board lowered their short-term interest rate target to close to zero and it’s remained there ever since. It seems hard to believe but as recently as early 2008, the target was 4.25 percent. Investors’ choices … Continue reading
Most people devote far too little time to estate planning. It sounds like something only the very rich should do and even they ignore it as much as possible. Everyone should have a will and advanced directives — health care proxy, power of attorney, living will. While seniors are more likely to need these documents, anyone can be the victim of an accident or health emergency. Beneficiaries on IRAs and other retirement accounts and insurance policies should be reviewed periodically. … Continue reading
Planning for Retirement Often I am asked how much money is enough for retirement? On the surface, it’s a simple and logical question but in reality it’s quite complex. Almost always, the answer is “it depends.” When are you planning to retire? Age 50? 60? 75? Never? Where are you going to retire? Manhattan? Orlando? Rural Oklahoma? It makes a big difference. Most people would agree that it takes more money to retire in Manhattan than Oklahoma. But what … Continue reading
Do it Yourself? — Not! I run into a lot of do it yourselfers who manage their financial affairs adequately, even capably. But many run into issues and by the time I am called in, it is often too late or significant damage has already been done. Recently, I’ve been brought it to work on the financial affairs of several people where the need arose unexpectedly. I had to guess the clients’ wishes and scramble for clues to piece … Continue reading
The U.S. stock market has been on a tear for nearly five years. It’s sometimes hard to keep that in mind when we have a terrifying dip like we did last week. But over this five year period the U.S. stock market has nearly tripled. Most foreign stock markets haven’t fared nearly as well. A month ago, the U.S. stock market represented 52 percent of the value of all global stock markets, according to Dimensional Fund Advisors. At year end … Continue reading
The Dog That Didn’t Bark This summer the Washington Post had an article titled,” So Whatever Happened to the deficit?” Not quite a year ago, House Republicans threatened to shut the Federal government as part of their effort to lower the deficit. Meanwhile, while no one was looking, the deficit shrunk dramatically on its own. The deficit has shrunk from an unsustainably high $1.6 trillion in 2009 to an estimated $500 billion for the fiscal year that ends in a … Continue reading
Pension Woes Recently the New York Times highlighted the troubles of the New York City pension system. The pool of money held to pay future benefits is at least $100 billion short of where it needs to be. Experts debate the exact amount but it’s clear that there’s not enough money to cover obligations. The pension troubles consuming the budget, rising from 2 percent of total spending to 11 percent in a decade. What’s also clear is that this huge … Continue reading