Do You Have Enough For Retirement?This new research from the Center for Retirement Research at Boston College boils down to:The key finding is that roughly half of the nation’s working-age households are at risk of falling short even if they work to age 65 and...
Diversification Can Work, If Correlations Are NOT HighFollowers Of Jae’s Corner Were AlertedYou have seen the thumbnail below before, it referred to Q1 2021. By the way, equities today are almost entirely unchanged from that point in time.Now ask: was the risk worth...
Complete Misunderstanding of Investments
Let’s Speculate For Fun (Not)A regional bank run wasn’t my #1 candidate for the ripple effects of higher interest rates.My #1 candidate is over-leveraged pension fund managers aboard, who hedged their foreign exchange exposure. Last year, long-dated GBP bonds dropped...
Banks Don’t Need To Auction Their Rare Books, YetLet’s say you had an asset, like a rare book, in your basement. You paid $XXX.You used the value of that book, as collateral. You borrow money, with the value of the rare book at $XXX. The reality is that you do not...
Interest Rates Suddenly LowerBut This Time For The Wrong ReasonNPV (price) of bonds notably higher, and why? Because of fear, due to the issue that we will discuss tomorrow. While we have been noting that risky assets can be supported by lower interest rates, that is...
Portfolio Analyzer | My ExplanationYou Need To Know How To Use ItThere are tools that tell you how likely it is that your money will last. Western & Southern (click here).Milliman’s RISE (click here).I am not doubting the accuracy of the calculations themselves....
The Silver Lining? Maybe This Is ItThe silver lining is that the actual professional market knows everything I have written here, and so that ‘might’ mean that they already know, and that current prices already include this uncertainty in current prices. Maybe.Retail...
How Would You Value Risky Assets?If liquidity in bond markets disappears, then you cannot even value the NPV from the formula, do you see it? If you cannot get a number for the denominator at all, and the numerator is full of errors and other agendas (like sell-side...
What Did You Think Would Happen?IF you saw that interest rates were going higher than expectations, then the losses in risky asset markets (NPV) was clear (but always always uncertain, look at the image at the very bottom).. At that time, the rational decision was...
Why Do Foreign Markets Matter?My early morning comments on this article are here, click on the image to listen to my dulcet tones, describing this article.Now, there is no coordination among global central banks and governments.If you are a HUGE investor, running...
Panic (At Last)We enter the top of the sixth inning. I highly suspect that this inning will not be over soon.Since March (actually since very early last year), it’s been eerie. People’s memories aren’t great, so let’s stick to 2022.The first quarter was easy. People...