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Are You Saving Enough For Retirement?

By Posted on In Finding Confidence, Investment Behavior, Retirement, Rule of Thumb, Uncategorized

Last week, a chart was circulating the internet helping to illustrate how much you should have saved for retirement based on your age (See Below).

Like many rules of thumb, it can serve as a guide but it lacks several key assumptions. It doesn’t factor in pensions, annuities or real estate. The biggest flaw deals with a term called replacement income, this chart assumes that you will be able to live off of about 80% of your pre-retirement income. You would only know that if you dug into the research that is mentioned in the footnotes.

And in our experience, how much income a retiree needs to live on each year varies greatly.

This chart is probably most helpful for younger savers (50 years and less) and who do not expect much in the way of a pension and have no idea what their retirement income needs will be.

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Why Waiting For The Right Time To Invest May Cost You In The End

By Posted on In Cash, Economy, Investment Behavior, Rule of Thumb, Uncategorized

At least once a week, a client will give me a reason why they don’t want to invest in the US stock market. They mention the headlines (which are designed to scare investors), and talk about the crisis-du-jour, or reference the looming economic dark clouds growing in the distance.

And so they sit in cash, with its perceived safety, waiting for the dust to settle, the clouds to clear, and the right time to invest.

But will it ever come… will it ever be so clear to the investor as to when they should invest?
Perhaps not.

What Cheap Oil Means For The Shale Boom

By Posted on In Investment Behavior, Investment Strategies, Politics & the Economy, Trend Updates, Uncategorized

Shale oil production is more expensive than traditional oil production – It costs more to get shale oil out of the ground. So when the price for oil drops, like it has, it hurts shale oil production a whole lot more than with other production methods. Bloomberg estimates that the price of oil needs to be over $80 a barrel for US drillers to make any profit. Oil is hovering right around that figure now.

For more reading:

Bloomberg’s Quick Take

Oil at $80 a Barrel Muffles Forecast for US Shale Boom

What’s the best investment?

By Posted on In Investment Behavior, Investment Strategies, Retirement, Rule of Thumb, Uncategorized

In a recent Gallup poll, Americans were asked what they thoughts was the best investment to make over the long term. Their choices:

Real estate
Gold
Stocks
Savings Accounts
Bonds

The average American incorrectly believes that Real Estate is the best investment over the long term.

The following article presents a good argument for why Stocks may be the best investment over the long term. And I’m glad that they made note that investors should be shifting to lower risk assets the closer they get to retiring.

Less Than a Quarter of Americans Get the Most Important Investment Right

Now May Be The Best Time To Check Your Risk Tolerance

By Posted on In Investment Behavior, Investment Strategies, Retirement, Uncategorized

Is this the top of the market? If so, are you (and your investments) ready for the possible roller coaster that could follow?

That’s the gist of a recent WSJ article, and it’s not bad advice to consider.

Investor’s appetite for risk is constantly changing.  When the market is bullish (like it is right now) investors want to maximize their returns and are willing to take on more risk.  Yet, as soon as the market turns sour, investors want to limit their risk and move to something “safer”.

That knee-jerk reaction can often end up hurting the investor in the long run. They end up buy and selling at the wrong time.

It’s better to take time now for investors to imagine how they would feel if there was a 5% or 10% drop in the market.  Would they stay calm and stay the course or would they be looking to move to more conservative investments?

If you haven’t thought about that, take some time now to consider what you would do.

Of course, we can help guide you.