Archive for the ‘Contingency Planning’ Category

To Bail or Not to Bail

Tuesday, June 1st, 2010

That is the question. Whether ‘tis nobler in the mind to endure the slings and arrows of outrageous equity markets, or to take rise against a sea of portfolio fluctuations – and, by opposing, end them.
Shakespeare’s portfolio decisions are not recorded. Nonetheless, his protagonist in Hamlet displays a psychology remarkably like that of non-professional equity investors. They can’t make up their mind, either. On the one hand, they can still feel the terrifying sensation of the equity downdraft in late 2008 and early 2009. On the other hand, they are obsessed with “getting back” what they lost – and how [...]

A Worthwhile Economic Indicator

Saturday, May 15th, 2010

The April, 2010, issue of Kiplinger’s Personal Finance magazine contains an article that is useful on several levels. “Should You Buy or Rent?” is intended as a primer for readers in the market for a home. It does that job well. It may be worth more, however, for something that its author did not intend – providing a leading economic indicator for our time.
Buy or Rent?
The article’s basic purpose is to dampen the ardor of would-be home buyers attracted by the promise of low prices, low interest rates, and a first-time home-buyer tax credit. The fundamental choice faced by potential [...]

Managing Retirement Withdrawals

Friday, April 2nd, 2010

Retirement finance has an accumulation stage and a decumulation stage. Accumulation gestates, hatches, and cooks your retirement nest egg; decumulation allows you to eat it. Accumulation commands the lion’s share of attention in popular finance, but decumulation, or distribution, is equally important. Understanding how to disburse wealth is just as important as understanding how to build it.
 The Basic Problem
On retirement day, you possess a store of wealth built up throughout your working life. Stretched out before you is the rest of your life, of uncertain duration. You want to withdraw a sufficient quantity of wealth to finance a comfortable lifestyle, [...]

Stocking Up On Food: Kooky, Clever, or Just Plain Clunky?

Monday, March 22nd, 2010

In the wake of 2008’s financial crisis and the ensuing recession, speculation about total financial collapse is rife in unofficial circles. Armageddon scenarios are familiar to most Americans. In our lifetimes, we have faced nuclear annihilation, attack by extraterrestrials, collision with asteroids, nuclear winter, global cooling, global warming, various other eco-catastrophes and killer viruses.
 Authorities invariably scoff at such predictions, but in this case they have only themselves to blame. In the fall of 2008, Treasury Secretary Paulson and Fed Chairman Bernanke cooked up their own doomsday scenario in order to terrify Congress into passing bailout legislation. Apparently, this kind of [...]