I thought I might publish my initial letter to my financial planner so you can see why I decided to remove my money from my WRAP Account and put it in cash. I gave my retirement nest egg money to my financial planner in November 2006.

By about May of 2007 I was getting concerned about how it was being managed. The returns were not good and as time went on I became very nervous about the stock market. After having managed my own retirement funds for the previous ten years I didn’t want to become paranoid about not being in control.

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Most articles about risk are the usual ones listing each risk and what it is. Explanations don’t really make the point. What is needed is some clear examples of what risk really is and how Baby Boomers have to be very careful risk-taking with your nest egg if it is all you have to retire on, without having to sell our house, wife and kids just to live.

Everything I talk about on this blog is aimed at Baby Boomers who are about to retire or are in retirement. That’s the important thing here.

My definition of Risk is investing in something where there is a probability I may suffer a serious loss. The size of the loss is more important that the probability of one occurring though.

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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 »

Well I didn’t expect to become a star overnight and maybe I won’t But anytime I can get in front of a camera to push my point about Baby Boomers needing to protect their nest egg it’s a bonus.

Today I got that chance. I did an interview with Channel 10 in Sydney Australia. It goes on air tomorrow at 11:00 am and the evening news. I might get 20 seconds or so. Still it all helps.

I am hoping I manage to strike the right chord, concerned, responsible and objective not alarmist. But after reading the survey by Mercer written about in my post “Government takes control of Baby Boomer Retirement Nest Eggs“, maybe I need to be alarmist.

Baby Boomers have only had 20 years in Australia and a lot less in other countries to prepare for financing their own retirement. To many this will still come as a shock. The pension looms large in their make-up from watching their parents retire.

However we Baby Boomers have been charged with the responsibility of looking after ourselves and even though there is a pension and social security life-line we want more than that. 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.

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