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An age-based savings multiplier rule of thumb as a quick test
One retirement readiness rule of thumb: Have 1x your salary saved by age 30. What about other ages? …2x at age 35, 3x at 40, 4x at 45, 6x at 50, 7x at 55, 8x at 60, and 10x at 67. These are general rules of thumb, however, that vary according to when you plan to retire and other factors. Use the WealthStep free Planning/Saving advice engine to get advice…
Uncertainty is an interesting beast
Life would be less interesting if we knew how everything would turn out in advance. However, the same factor of the unknown that makes investment markets nervous is what makes investing attractive in the long-run. Unpredictability can cause asset prices to drop, but is also indirectly what pushes prices higher when good news occurs and fear diminishes. Over the last year, surprises included continued slow global growth, the first interest…
Noise gets more attention than silence, however what is quiet can sometimes be dangerous to ignore
Stock market volatility attracts a lot of attention in the news, which causes some people to believe that such fluctuations are the only retirement preparation risk. In reality, there are other risks that are worse. Here’s the lowdown… When scared investors reduce volatility risk (i.e. reduce or get out of stocks), other risks increase… inflation and longevity risk. Inflation risk is about rising prices, if your savings value isn’t also…
What to make of “Brexit”
SUMMARY: The United Kingdom’s vote last week to leave the European Union has global significance, but it may take years to know the full impact. The U.K. is likely to feel long-term affects. In the short term, uncertainty about the degree of global ripple-effect makes investment markets nervous. Given tepid global economic growth, the medium-term stock market outlook that was already guarded before Brexit is a bit more so now,…
Wait a minute… the new “Fiduciary Rule” is supposed to make all financial advisors put their clients’ best interests first, but has exceptions?
A few weeks ago, the Department of Labor finalized the new “Fiduciary Rule.” In concept it helps protect investors from abuse, but it has big gaps, through exceptions. Unfortunately the gaps are not easy to find, but could negate much of the intent of the new rule. As context, most people aren’t aware that investment advice companies fall into two groups: 1) A big group of companies, enormous and tiny,…
Learn to like volatility
How many songs have you heard that include lyrics like “Here we go again” or “It happened again” or “I did it again”? There are many, because trials and tribulations in life are many. The best outcomes happen, however, when you push on through.
When markets drop: take deep breaths, and don’t do anything
Given the recent increase in market volatility, the article below may be a helpful read. As a WealthStep client or follower, you may have heard these timeless ideas before in our letters, webinars, and blog / Facebook / Twitter posts (follow us to get helpful thoughts and reminders!).
The Reality of Red Numbers
How often are monthly stock market returns negative? Is there a pattern within years or across years? How about the bond market? You may notice that short-term volatility is a fair price to pay… the longer the time period, the fewer the negative returns. In other words participation and patience pays. And, remember that inflation (i.e. purchasing power risk) is a bigger long-term risk than market volatility. Gain perspective from…