The 7.58% Cash Flow Solution!

In today’s low interest rate environment, anything above a 2% return sounds pretty good, and if you can find something that “returns” a “guaranteed” 7.58%, that’s great, right? I saw the title of this blog post in an ad for an immediate annuity. For those of you familiar with immediate annuities, you’ll know what care the ad’s author has taken to make sure the 7.58% “solution” sounds attractive (like a rate of return?) while not being shown, deceptively, as a “return”.  The solution? Call it a...

The Target Date Fund

Many 401(k) and 403(b) plans include Target Date Fund choices.  These generally list the fund company, a year (somehow related to your retirement year), and some kind of reference to Target Date or a brand name such as “Freedom Fund”, Fidelity’s target date funds.  There are some pros and cons to these funds, and some things you should know before you use them in your investment portfolio.  In this blog, I’ll describe some of the “pros” and “cons” of target date funds. Pros: 1.  They’re on “autopilot”. ...

Actively managed vs. indexed mutual fund...

I’ve just finished listening to a webinar session led by Rick Ferri, who offers low cost passive investment management at his firm, Portfolio Solutions (www.PortfolioSolutions.com).  Rick has been at nearly every Garrett Planning Network retreat that I’ve attended, and I’m always impressed with his passion and knowledge about investments. This particular webinar is titled “The Death of ‘Buy & Hold’ Has Been Greatly Exaggerated”.  Rick summarized the findings in his most recent book, “The Power of Passive Investing”.  Rick talked about 2...