March 2020 was not the worst-performing month in stock market history, but it was the craziest month in stock market history, according to the author of today’s article. That is, if crazy is defined by monthly market volatility. In fact, he notes that in terms of one particular measure of volatility, “March 2020 wasn’t just a little crazier than the next 3 highest months…it was significantly crazier.” For more on how March was the craziest month ever for equities – and other assets classes – CLICK HERE.
New research from well-known, Boston-based money management firm GMO has an important warning for retirement savers of all ages when it comes to their glide paths (the gradual reduction in one’s allocation to equities as they get closer to – and then enter –retirement). As today’s article outlines, the research indicates that “No matter how young you are, chances are that you are too heavily invested in equities.” What is the potential flaw in how glide paths have been determined up until now – and what might more appropriate glide paths look like? CLICK HERE.
As market volatility picked up in October, so did the daily trading activity in 401(k) plans – with one analysis finding that the daily trading activity in 401(k) plans was more than double the normal level during this period, as investors abandoned equities and fled to fixed income. But retirement investors may be increasing their risk of a “retirement fail” with this sort of “knee-jerk” trading activity. For more, CLICK HERE.
Retirees have been told that, especially given the increasing number of years spent in retirement, they need to maintain a sizable position in equities. It turns out, however, that maintaining a healthy equity allocation in retirement may not be as beneficial for retirees as believed: The author of today’s article analyzed a number of different retirement funding scenarios and came to the conclusion that the benefit to retirees of increasing their equity allocation is actually very modest. For more, CLICK HERE.
The expectation in some circles is that emerging markets will be the only category of equities that will generate a significant return above inflation over the next 7 to 10 years. Given this, retirees may be tempted to allocate a sizable chunk of their portfolio to emerging market equities. Today’s article, however, outlines why retirees may be well-served to reconsider such a move, cautioning that “there are more ways to lose money and make substantial errors investing in emerging markets than there are in developed markets.” For more, CLICK HERE.