Value averaging down increases market returns by lowering your basis. Dividends increase the total return further.
That’s how you catch a falling knife without bleeding. And that’s why this is a good time for those who have a strong balance sheet and a long-term plan to manage Upside, Floor, Longevity, and Reserves.
You know that the fees you pay to invest your savings matter, and that these costs, even tiny percentages, can significantly reduce your gains over a lifetime of saving and investing. You are probably also aware of the rise of “robo-advisors,” web-based automated do-it-yourself investment management sites like Wealthfront and Betterment that provide sophisticated, algorithmic […]
Upside is the amount that can be exposed to market risk for growth without jeopardizing household lifestyle.
“A mere madness, to live like a wretch, and die rich.” —Robert Burton, The Anatomy of Melancholy, 1621 My mother used to say that a gentleman lived on the interest from his principal. That didn’t apply to our circumstances, not by a long shot (substitute “sweat of brow” and you’re closer to fact). I suspect […]
Inescapably the time comes to consider that spending from savings is different from saving from income. You survey your savings and investments, scattered across a number of accounts, and the question arises, how best to manage this money to get the best lifetime outcome for the household when you are no longer earning a high […]
I just returned from the RIIA (Retirement Income Industry Association) Fall Conference in Charlotte where I gave a presentation on emerging robo-advisors and financial planning. For most of you, sitting through a conference listening to talks about retirement income probably ranks somewhere between enduring a visit to the dentist and enduring a visit from a […]
There is an ongoing discussion in personal finance about the differences between safety-first and probability-based approaches to managing money, especially money for retirement. You are (probably) familiar with the probability-based approach from hearing some of these well-known rules of the thumb: [list style=”orb” color=”green”] You can withdraw 4% a year and (probably) not run out […]