For years now, we here at ISI have highly recommended that for the purpose of planning withdrawals of retirement funds, generally speaking, it should be limited to approximately 3% annually of one’s portfolio. Additionally, I have never been a proponent of automatically adjusting one’s portfolio based upon age. Instead, I have always urged clients to have one’s specific goals and financial plan be the driver of how investments should be allocated. This brief, 3-minute video discusses both of these very important issues, and I’m confident you’ll find it of interest.
In the following brief, three-minute video, you will learn why sound diversification is so very important, and why it truly is your best friend as an investor, allowing you to “sleep well at night.”
As you're nearing retirement, and ultimately transition into retirement, there are many vital and complex variables that will have a tremendous impact on your future financial security. It can become an overwhelming maze that's continually changing in the areas of sound investing, tax laws and opportunities, estate planning, Social Security, Medicare, and many other aspects of dynamic financial planning. This is where a qualified, experienced financial planner and team can be invaluable to you and your family when facing all of these very important decisions. This brief, 3-minute video highlights just how important this can be.
Confirmation bias is the tendency to give more weight to evidence that confirms our beliefs, regardless of whether the information is true or not, than to evidence that contradicts our beliefs. This behavioral bias, coupled with our inherent propensity toward over confidence and optimism, can lead to poor investment decisions, high costs, missed opportunities and substantial volatility in an actively managed portfolio. Pay special attention to this brief video as it’s most definitely filled with time-tested wisdom.
In the world of investing, financial science and academic evidence have shown that building a portfolio that includes a tilt toward certain “factors,” such as smaller company stocks and value stocks, not only has increased long-term returns historically, but also can increase future expected returns.
In this brief, informative 3-minute video, you’ll learn more about why this can be so important.
There’s a whole range of behavioral biases that human beings are prone to that cause us to make poor investment decisions. One very common one is referred to as “availability bias.” Two of the most common types of availability biases are primacy and recency. They can tempt and lure us into making decisions based on the first thing we think of, or the last thing we heard. Examples might include: Did your first investment experience end poorly? Was the last stock that a talking head on CNBC recommended a tremendous success? Making decisions based on these types of biases is risky business when it comes to investing. In the following video, this bias is further discussed in a most practical way that will hopefully help you become a better investor.
Actively managed, "hot-performing" funds are regularly promoted by the media and many financial advisors. However, independent and peer-reviewed academic research clearly demonstrates that they rarely beat passive, low-cost funds in terms of net performance. And of those that do, they amount to less than one would expect by random chance alone. As you will observe in this brief video, most fund managers are actually "closet indexers," essentially nothing more than a very expensive index type fund. This is one of the biggest reasons why millions of investors are finally fleeing expensive, underperforming funds in favor of low-cost passively managed funds.
Would you ever even think of building a house without first having a blueprint? Of course you wouldn’t. And when it comes to achieving future financial security, nothing is more important than a goal-driven financial plan to help guide your investing and to help measure your progress. The following brief video offers substantive insights as to why a detailed financial plan is invaluable.