A 49.5 se cotiza, en www.intrade.com, la probabilidad de una recesión en USA.
En la encuesta de Yahoo, 59% de los encuestados consideran que se avecina una recesión en USA.
miércoles, 19 de diciembre de 2007
Recesión en USA
A 49.5 se cotiza, en www.intrade.com, la probabilidad de una recesión en USA.
En la encuesta de Yahoo, 59% de los encuestados consideran que se avecina una recesión en USA.
lunes, 3 de diciembre de 2007
domingo, 2 de diciembre de 2007
The Lies That (Some) Financial Advisers Tell
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I recently ran across an interesting article by Ric Edelman in Bottom Line/Personal (no link, sorry). In it, he ran down a list of the biggest lies that you’ll hear from a financial adviser, and how they could cost you money. What follows is a synopsis of that article, along with some thoughts of my own. While it may be a stretch to call some of these things “lies,” they certainly can be misleading.
-You should rebalance your portfolio once a year.
In truth, Edelman argues that once per year isn’t enough. Because market fluctuations can knock your portfolio allocation out of whack, it’s important to periodically rebalance it. But if you blindly choose a specific date, Edelman worries that it might wind up being the wrong time of year, or that you might have waited too long to react to a significant shift in the market. Rather, you should rebalance as soon as any investment category shifts by a predetermined amount. The example that Edelman gives is a target allocation of 10% in small caps. If your portfolio drifts to the point that you’re now holding 8% or 12% in this category, you should consider rebalancing to get back to the 10% target.
All in all, this makes sense, and it helps to ensure that you are selling high and buying low. The only real ‘gotcha’ here is to be aware of the potential tax consequences. In particular, rebalancing by buying/selling in a taxable account could result in a nasty surprise come tax day. An alternative strategy would be to simply shift your contribution amounts such that you are buying more of one class and less of another until things get back in line. Another option would be to use so-called Target Retirement funds, which automatically adjust to track an age-appropriate allocation.
-You should shift all of your accounts to more conservative investments as you approach retirement.
Instead of using your retirement date as the guiding force, you should focus on when you expect to start tapping into a certain account. This makes sense to me because retirees are living longer than ever before, and shifting to an overly conservative mix too soon could easily cause you to run out of money before you run out of days. According to Edelman, you should maintain a more aggressive investment mix in accounts that you won’t be tapping for seven or more years, whereas you should to an increasingly conservative mix after that until you’ve achieved the desired conservative stance about three years before the anticipated withdrawal dates.
-The stock market will crash between 2017 and 2024.
The logic here is that when baby boomers start retiring in droves, they’ll start liquidating their stock holdings. According to Edelman, however, there’s no reason to think that this batch or retirees will be too different from those that have gone before them. Thus, he expects them to gradually liquidate holding as needed, rather than staging a massive sell off.
-Retirees who focus on investment income should focus primarily on interest-yielding bonds and CDs.
According to Edelman, this strategy causes your income to fluctuate too much, depending on the vagaries of interest rates. If rates fall, you’ll have less cash coming in and will have to scale back your lifestyle. While creating a CD ladder can help smooth out interest rate fluctuations, but if you spend out the interest every year then you’re exposing yourself to inflationary risk (i.e., your principal won’t increase, so your interest won’t increase even though prices will).
Edelman recommends adding dividend-paying stocks the income portion of your portfolio. If the resulting income isn’t sufficient, you’ll be able to sell a portion of your assets that have (hopefully) appreciated. Of course, there’s also the risk that your stock won’t appreciate, and you’ll be stuck in the same pickle.
-Try to have enough saved up to pay for college based on the projected costs based on when your kids will matriculate.
The danger here is that college costs will continue to rise while your kids are in school. Thus, if tuition is $30k/year when your child starts school and prices continue to increase at 7%, the total cost will be $133,198 rather than $120,000.
Of course, this assumes that you want to pay for your kids’ (or grandkids’) college in the first place. But assuming that you do, it’s something to keep in mind.
I recently ran across an interesting article by Ric Edelman in Bottom Line/Personal (no link, sorry). In it, he ran down a list of the biggest lies that you’ll hear from a financial adviser, and how they could cost you money. What follows is a synopsis of that article, along with some thoughts of my own. While it may be a stretch to call some of these things “lies,” they certainly can be misleading.
-You should rebalance your portfolio once a year.
In truth, Edelman argues that once per year isn’t enough. Because market fluctuations can knock your portfolio allocation out of whack, it’s important to periodically rebalance it. But if you blindly choose a specific date, Edelman worries that it might wind up being the wrong time of year, or that you might have waited too long to react to a significant shift in the market. Rather, you should rebalance as soon as any investment category shifts by a predetermined amount. The example that Edelman gives is a target allocation of 10% in small caps. If your portfolio drifts to the point that you’re now holding 8% or 12% in this category, you should consider rebalancing to get back to the 10% target.
All in all, this makes sense, and it helps to ensure that you are selling high and buying low. The only real ‘gotcha’ here is to be aware of the potential tax consequences. In particular, rebalancing by buying/selling in a taxable account could result in a nasty surprise come tax day. An alternative strategy would be to simply shift your contribution amounts such that you are buying more of one class and less of another until things get back in line. Another option would be to use so-called Target Retirement funds, which automatically adjust to track an age-appropriate allocation.
-You should shift all of your accounts to more conservative investments as you approach retirement.
Instead of using your retirement date as the guiding force, you should focus on when you expect to start tapping into a certain account. This makes sense to me because retirees are living longer than ever before, and shifting to an overly conservative mix too soon could easily cause you to run out of money before you run out of days. According to Edelman, you should maintain a more aggressive investment mix in accounts that you won’t be tapping for seven or more years, whereas you should to an increasingly conservative mix after that until you’ve achieved the desired conservative stance about three years before the anticipated withdrawal dates.
-The stock market will crash between 2017 and 2024.
The logic here is that when baby boomers start retiring in droves, they’ll start liquidating their stock holdings. According to Edelman, however, there’s no reason to think that this batch or retirees will be too different from those that have gone before them. Thus, he expects them to gradually liquidate holding as needed, rather than staging a massive sell off.
-Retirees who focus on investment income should focus primarily on interest-yielding bonds and CDs.
According to Edelman, this strategy causes your income to fluctuate too much, depending on the vagaries of interest rates. If rates fall, you’ll have less cash coming in and will have to scale back your lifestyle. While creating a CD ladder can help smooth out interest rate fluctuations, but if you spend out the interest every year then you’re exposing yourself to inflationary risk (i.e., your principal won’t increase, so your interest won’t increase even though prices will).
Edelman recommends adding dividend-paying stocks the income portion of your portfolio. If the resulting income isn’t sufficient, you’ll be able to sell a portion of your assets that have (hopefully) appreciated. Of course, there’s also the risk that your stock won’t appreciate, and you’ll be stuck in the same pickle.
-Try to have enough saved up to pay for college based on the projected costs based on when your kids will matriculate.
The danger here is that college costs will continue to rise while your kids are in school. Thus, if tuition is $30k/year when your child starts school and prices continue to increase at 7%, the total cost will be $133,198 rather than $120,000.
Of course, this assumes that you want to pay for your kids’ (or grandkids’) college in the first place. But assuming that you do, it’s something to keep in mind.
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