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https://preservewm.com
We've been keeping up with the latest headlines...
here are two of our favorites worth sharing.
** Your Money
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A tried-and-true investment strategy that has guided countless retirees through their golden years might now be a ticking time bomb. The 60/40 portfolio — comprising 60% stocks and 40% bonds — combined with a 4% annual withdrawal rate, has long been considered a safe approach for retirement income. But what if the future doesn’t mirror the past?
Last week, I noticed an article that should have been on the front page but buried in the middle. It warns of potential financial disaster for retirees relying on this traditional strategy. While I typically dislike sensational headlines meant to spark fear, this piece raised some valid concerns worth considering.
The Hidden Danger: Sequence Risk
One of the biggest threats to a retiree's nest egg isn’t just market performance, but the order in which returns occur — a concept known as "sequence risk." This risk is critical in the early years of retirement when the portfolio is most vulnerable. Imagine retiring in 2009 or 2022 and facing a sharp market downturn right as you begin to withdraw funds. Selling investments in a declining market, coupled with withdrawals, can severely deplete your portfolio, leaving less capital to recover when markets rebound.
Are Future Returns Likely to Disappoint?
Beyond sequence risk, another challenge looms: the potential for lower returns in the coming decades. Historical data and reliable predictors suggest that the future might not be as rosy as the past. For instance, Robert Shiller’s cyclically adjusted price-to-earnings ratio (CAPE) is currently higher than 97% of historical readings since 1880, suggesting that stocks are overvalued. Research by AQR shows that after CAPE readings in the 90th percentile, real stock returns have averaged a mere 0.5% over the next decade. Meanwhile, 10-year Treasury yields, after accounting for expected inflation, offer just a 1.65% real return.
A Smarter Approach to Retirement Income
While rules of thumb like the 60/40 portfolio and a 4% withdrawal rate provide a simple starting point, we at PWM believe in a more nuanced approach. We design investment strategies tailored to your specific retirement income needs, accounting for both short-term and long-term goals. This includes carefully allocating funds for immediate living expenses, future growth, and even legacy planning for philanthropic goals.
Ultimately, a one-size-fits-all strategy might not be enough in today’s uncertain markets. It's crucial to have a personalized plan that considers various risks and market conditions, ensuring your retirement is as secure and enjoyable as possible.
A Time-Honored Strategy Puts Your Retirement at Risk of Financial Ruin (https://www.wsj.com/finance/investing/60-40-portfolio-retirement-61716c4d?st=wxwk4e247harpf7&reflink=desktopwebshare_permalink)
by Spencer Jakob
** Your Life
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Does dementia happen gradually or all at once? There are many different types of dementia, and all of them are progressive. This means symptoms may be relatively mild initially but worsen over time. Dementia is not a single condition and is caused by different physical diseases of the brain. Each type of dementia affects a different area of the brain in the early stages. The speed at which dementia progresses varies a great deal from person to person, so it is extremely difficult to be sure how quickly a person’s dementia will progress.
Problems with memory, thinking, problem-solving, language, and often changes in emotions, perception, or behavior are also present. There are three stages of dementia: early (mild), middle (moderate), and late (severe). The most important point is that dementia does not follow an exact or certain set of steps that happen in the same way for every person with dementia. It can be difficult to gauge the stage.
Lastly, evidence shows that there are things a person with dementia can do to maintain their abilities longer, such as maintaining a positive outlook, eating and sleeping well, accepting help, not smoking or drinking too much alcohol, maintaining physical, mental, and social activities, managing existing health conditions, regular medical check-ups, and regular vaccinations.
The progression, signs and stages of dementia (https://www.alzheimers.org.uk/about-dementia/symptoms-and-diagnosis/how-dementia-progresses/progression-stages-dementia#:~:text=Dementia%20is%20progressive.,progressing%20in%20'three%20stages)
source: Alzheimer’s Society
https://www.linkedin.com/in/danheth/
https://www.linkedin.com/in/rosalynn-harvey-heth-mpa-ceps-3a3aa3191/
** Complexity Simplified
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Make-at-home sushi is fast gaining traction in popularity. It’s easy to prepare and much less costly if made at home, as opposed to going to a restaurant. However, you do need to start with sushi-grade fish, not just any raw fish you buy from the grocery store. Eating bad raw fish is a risk to your health. "Sushi-grade" and "sashimi-grade" are more marketing terms rather than an official set of trusted guidelines. That said, many brands and sellers use "sushi-grade" as a way to label fish that is safe and OK to eat raw. Sushi-grade fish tends to be fish that is super high-quality, and often sushi-grade signifies that you can consume the uncooked fish without worrying about getting sick or dealing with a foodborne illness. Kate Koo, head sushi chef and owner of a sushi restaurant and seafood technical director at Alaska Seafood Marketing Institute, recommends finding a specialty market, fish market, seafood marketplace, specialty Asian market, or a higher-end grocery store — somewhere you
can go where you trust the fish monger behind the counter and can ask them, "Can this be eaten raw?" If the response is a confident "yes," then that's a great sign. If you sense some hesitation or if the answer is "I don't know," it's not worth chancing it. Also, appearance and smell can be detectors of good fish.
What Is Sushi Grade Fish? Everything You Need to Know and Where to Buy (https://www.goodhousekeeping.com/food-recipes/cooking/a44690733/what-is-sushi-grade/)
by Trish Clasen Marsanico
** Trivia
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A: An alarm clock
Q: What’s the hardest rock?
https://youtu.be/ggSDeyPu_e4?si=IX3-xWBxxOh0Afr3
** Back in 1955, this song hit #1
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