In my Google travels looking for things to write about on my blog I came across the Retirement Watch web site. I found it when I typed in Avoid Large Losses in Retirement. The first stop was to review his book on Google Book Search. It’s called “The New Rules of Retirement“. Scrolling through the preview of the book I came across the bit I was looking for about “avoiding large losses.  Under a subtitle of “The Core or Foundation Portfolio, Mr Carlson talks about  an investment pyramid with a foundation based on mutual funds or index funds based on a value approach to investing. (Rather than growth stock investing)

Value investing means the fund manager will sell overvalued assets and replace them with discounted ones.

But here are the two most important items for me.

“The Core Portfolio is constructed with the idea that the primary goal of every investor is the avoid large, permanent losses. …. Other investment approaches, such as “buy and hold strategies“, accept large losses over different time periods. Large losses, matter to investors who are retired or planning for retirement.”

Read the rest of this entry »

In an article by Annette Sampson in the Sydney Morning Herald a wealth manager has admitted that after four years of 24.9% returns on the Australian stock market it was not sustainable. (not sure why fund managers only reported a return of 16.7% to their clients )

First it’s good to see these guys finally admit the obvious. Despite the title - “Lessons in the carnage” a formal apology from the wealth management industry doesn’t appear to be on the horizon anytime soon.

One financial planner did say in the article, “It would have been wise to sell first and ask questions later. As a traditional long-term investor this isn’t what I’d usually do but is precisely what one should have done over the past year”.

The seeds of doubt in the flawed buy and hold strategy may actually be growing. Read the rest of this entry »

I came across a free report I got from Jeffrey D. Voudrie some time back called, “The Unvarnished Truth About Investment Advisors…And Why You Don’t Need One In Order To Manage Your Money Well”.

He goes on to say it is, “A Straight-Forward Guide With The Information You MUST Know To Confidently Handle Your Retirement Nest Egg”.

You can get the report off his web site at Guarding Your Wealth - Special Reports. You’ll need to give him your name and email address to get to the download page. But you can always cancel his emails if you want to. I suggest you don’t as he gives a lot of free advice.

Whilst it is a report designed to promote his proprietary investment product, “The Portfolio Guardian”, I think it is well worth getting and reading.

He is a financial planner but he does many of the things I would like my financial planner to do including;

Read the rest of this entry »

I just read a column in the Australian newspaper where it says the Government is considering increasing the compulsory superannuation contribution to 12% or even 15%.

Nick Sherry Minister the “Super Minister” is not sold on the idea fully yet but I think he has it under consideration.

There are major problems with the current compulsory super system not least of which is the stated annual $860 Million paid to the wealth industry in fees just for taking 9% of our money by government decree. This in itself is criminal and makes a large dent in the end retirement amount over 40 or so years.

If the wealth managers lobbying hard in the corridors of Parliament House Canberra get their way and the compulsory contribution is increased to 15% that will increase their “take” of our kids annual contribution to $1.433 Billion. That is effectively a 40% pay rise for doing no more work. Does that seem fair to you?

Read the rest of this entry »

I emailed my financial planner in August of 2007 about my concerns for protecting my nest egg. Subsequent event show they were well-founded. Between the letter, this email and several other emails asking more and more questions to which I really didn’t get any answers I could rely on, I waited until the November 12th before asking for my money to be redeemed. I thought 3-4 months was enough time for them to satisfy my concerns. I really got nothing from them.

This Post is the last one I’ll do showing I was trying to get answers to my questions. But it could form the framework for others to use if you are not sure what to ask.

It is very important that you make sure your financial planner knows who you are whether you have your own retirement funds or are in a company fund. You need to establish contact and ask serious questions.

Greg Heiple of The Teeter Totter Principle has just released a new book call the BalanceZone I have been reviewing over the weekend.

My next post will be about it as I believe the BalanceZone is an evolutionary step from TTP to help us Baby Boomers manage our nest egg with or without the help of a financial planner. Read the rest of this entry »

Many Mutual Funds are now seeing their total funds being reduced dramatically by stock market losses and investor redemptions. In order to stop the redemptions Mutual Funds try to intimidate Baby Boomers not to do anything to protect their nest eggs in retirement.

I have taken some statements from the newspapers to make my points. Unfortunately most financial commentators think the same way and have a similar view on investing as the fund managers they write about. But rather than get into arguments with the writers I’d rather try and promote a different view. I want to win the war not just a battle.

Their liberal use of the phrase “Investors should not panic” without any qualification is probably one of the most flagrant ways they intimidate us. First of all if an investor uses a rational investment strategy and exercises stop losses when triggered to exit the market this is panicking by their definition. Even though this may be a well thought out strategy designed to minimise losses and a recognition that the market has proved your investment strategy wrong. There is no loss of face here because the investment didn’t work out. Just forget it and move on. Read the rest of this entry »

As I read more and more about the poor returns from the funds I also see more and more financial gurus rationalizing the losses on the funds and advising intelligent investors to hold on. Baby Boomers need to filter out some of these messages as they don’t apply to you.

It runs something like this. Investors have had 4 years of great returns so one bad year should not result in you taking you money out of the funds. (If you have lost much more than 10% on your risk-based assets like equity and property funds this is actually good advice I think - You’re stuck with your investments for now).

It implies that since the market has gone up in the long term it will soon recover and continue on in its merry way. They have no way of knowing this. Baby Boomers cannot rely on these sorts of statements when their retirement relies on the money they have saved in their nest egg.

It also implies that all fund contributors are investors. Baby Boomers are not investors any more once they have retired and are living off their nest egg. They are capital preservers first and foremost. If their funds make more than is needed to preserve capital that is a bonus. Chasing high returns is risky. The important thing is to avoid large losses because they will be too hard to recover from when taking a pension. Read the rest of this entry »

The Expo was well attended but many Baby Boomers were there to see the Winnebago campervans and visit the retirement village stands. I attended all the Financial Seminars which were not well attended at all.

The seminars ran all day. Here is a quick run-down of the ones I liked the best along with some comments by me.

Clearview Retirement Solutions

Here the key thing for me was the financial planners are paid a salary. That means no commissions before or after the sale. The presentation was very informative and covered much of the new legislation about retirement, super contributions and taxation and tax free withdrawal after 60.

Read the rest of this entry »