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Showing posts from January, 2014

Safety “Net”

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I’m one of those travelers who absolutely dreads cutting it to the last minute. Not that I haven’t been forced to do so, from time to time, but I’m generally the one chomping at the bit to get to the airport, or to hit the highway an hour before anyone else. In my defense, on more than one occasion that “cushion” has been the difference between catching a flight or not. Planning that only considers a “best” or “normal” scenario too often overlooks the unexpected—and sometimes that margin of error is all you have. For over a decade EBRI has modeled the nation’s potential retirement savings shortfall, and the EBRI Retirement Readiness Ratings™ provide an assessment of how many Americans are at risk of running short of money for needed expenses in retirement. In contemplating expenses, that model considers the regular expenses of living in retirement, as well as uninsured medical expenses, and the potential costs of nursing home care. However, we have also documented and quantified

Stocks Swayed by the Super Bowl?

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Will your portfolio soar with the Seahawks, or get kicked by the Broncos?   That’s what adherents of the so-called Super Bowl Theory—which maintains that when a team from the old National Football League wins the Super Bowl, the S&P 500 will rise, whereas should a team from the old American Football League prevail, stock prices would be expected to fall—would likely predict. Sure enough, last year’s victory by the Baltimore Ravens (who, it might be recalled, are really a legacy NFL team via their Cleveland Brown roots) coincided with a 29.6 percent gain for the S&P 500.   Moreover, the indicator has been correct 37 of the last 47 years, or nearly 79 percent of the time. Not only has the Super Bowl Indicator consistently predicted the direction of the market, but returns when the old NFL wins and when the AFL wins are dramatically different, according to a recent report in the Wall Street Journal , which notes that the Dow has averaged a healthy 11.6 percent return i

"Left" Overs

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On more than a few occasions in my youth, I would misplace some object of importance. Generally it was just something I set aside for just a moment in pursuit of some more interesting endeavor—and sometimes it was something I set down and forgot about until much later. Regardless, being unsuccessful in locating the object, I was frequently inclined to suspect that the culprit responsible for the disappearance was my mother, who—as mothers do, spent more than a little of her existence picking up objects that had been left unattended in unsuitable places. There were, however, times when she had played no role in the “disappearance,” and she’d admonish me to look more diligently—that “it didn’t just get up and walk away on its own…” Now, while there were times when I was certain that the object in question had done just that, once I was able to retrace my steps, to recall where I had been and when—and, inevitably, there it was. That said, I wasn’t always happy to find things where I

Penny Whys?

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We tried to introduce our kids to money and financial concepts relatively early. We encouraged them to save some of their monetary gifts, let them put the money in the offering plates at church, and provided them with a modest allowance for chores commensurate with their age and abilities. For all that, they never really seemed to fully appreciate the “value of money” until they started earning a paycheck outside the home (I knew they were “getting” it, when they wanted to know who FICA was!). Perhaps because of their early education, there weren’t massive behavioral changes. I was pleased to see their spending on gifts for family members rise with their income and, after an initial spending “spurt” (likely attributable to a sense of newfound wealth), they seemed to settle in. But what happened next was that, while they would spend money on others, they tended to hold back. In fact, what seemed to emerge was not so much a pattern of setting money aside, but a reluctance to spend; not

"Whether" Forecast

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This is the time of year where, in many parts of the county, the weather—and weather forecasters—dominate the nightly news coverage, certainly when the predictions are dire.  Indeed, having had the opportunity to live in several different parts of the country, I can assure you that the bigger the projected snowfall, the more hyped the coverage. Several weeks back, the local meteorologists were all agog about an impending snowfall in the Washington, DC area—a snowfall  initially projected at 2–4 inches of accumulation, but that was quickly revised to 3–5 inches, and then to 4–7 inches.  The local mass transportation systems sprang into action, announcing alternative schedules, state officials advised those who didn’t need to be on the roads to stay home, non-emergency federal employees in the area were granted an excused absence, while others were directed to telecommute. As it turned out, it did snow—but not much, and certainly not in the amounts that had garnered all the attention