First up is this article titled Could You Be Saving Too Much? I'll save you some time, no you could not be saving too much. The premise has to do with having too much left over at the end such that you deprived yourself from doing other things earlier in life.
Certainly there is a balance to be struck but to paraphrase Woody Allen there is no problem where having more money made it worse.
Ambrose Evans-Pritchard has a post about Zimbabwe as an investment destination. Stock market volume is now booming. Apparently US dollars are used as the currency now which eliminates a few problems. There was one stock mentioned. Mwana Africa is a Zimbabwean mining company traded in London. It looks as though it also trades on the US pinksheets with ticker MWNAF but the volume is woeful. The London volume is much larger for anyone interested in this sort of thing with an account at brokerage offering direct access.
To be clear I am not buying this stock and am not suggesting anyone else do so. But it is interesting that there is a stock available for a destination like this. It would seem that if a country has something to offer then capital will find its way in one way or another at some point.While I've never thought of Zimbabwe as an investment destination there are other countries that for now are not easily accessible with plenty to offer that I believe one day will be.
Schwab sent out notification that the Options Clearing Corporation is changing the symbol format for options. You can read about it from Schwab here. This stands to cause a lot of mistakes, trade errors or busted trades as this rolls out.
This article from Jason Zweig called ETFs Causing an Emerging Markets Bubble? is making the rounds. Zweig seems to be asking the question but concluding that the answer is no. I agree. Not everything that goes up a lot or might be overvalued is in a bubble.
The picture is from my trip to the NYSE last Friday. The picture is taken in the little area just upstairs from the floor where the shoot Squawk on the Street and sometimes Street Signs. So they were shooting Street Signs from there when I was visiting. That is Erin in the background with a guest during a commercial. Hopefully the picture gives at least a little sense of how cramped it is up there.
5 comments:
Unless you know the exact date of your demise, it is imperative that one plans to leave an estate. There should be more discussion on this subject. It is bad enough to be old but to be old and poor represents unaceptable planning.
RR, that was my exact thought (in fact, I thought of you) when I saw that headline blaring on Yahoo Finance this weekend.
Anon, your comment reminds me of the old saw about how you should never lament someone "dying broke"--it takes good money management and good timing. (kidding)
The "Die Broke" book is pretty actually pretty intriguing for retirement planning. The basic premise is that you should convert your savings to annuities piecemeal as you require more income due to inflation, inability to work part time etc. Any extra savings that you are sure that you will not need to turn into an income stream is gifted to your friends and heirs or charity before you die. By the time you die your assets consist primarily of your annuity and insurance policies. Your heirs or charitable trusts own everything else.
Not that I am advocating this idea, but it is an interesting concept that gets around the government daggers aimed at the "big pot o' money" retirement plan.
How do you know you are saving too much? I built a current cost of living spreadsheet indexed with COL variables. Like food increases by 3% /yr, health care increase 10%/yr. Vacation costs $xxx until 80-85? Assets increase by 4%/yr, etc. Life expectancy is best guess + 10 yrs?
I know very little about annuities, but isn't a Roth a more cost effective way to go unless you just do not want to deal with investing in low risk assets and you think you will outlive the actuary table age for you. You are paying an insurance company an asset management fee.
Question - Can you buy an annuity that is indexed to CPI for the area you live in?
What happens to your annuity income stream if the insurance company / issuer goes under? They are not covered by FDIC, correct? I believe Insurance companies oversight is at home state level or Country if non-USA?
I had a marine insurer go under and I was left w/o coverage and lost premiums and I had to find another insurer. This bankrupt insurance company was registered in NY state. I did receive a letter from NY state ins commissioner. $0.00 of paid premiums were return to me. Could the same thing happen with an Annuity?
Hi Richard, yes annuity companies can and do go bankrupt. I am not recommending them per se, just adding to the conversation. As a stock and bond investor you are taking the bet that you will die soon enough to not run out of money, your risks include 1) market losses 2) living too long 3) higher than anticipated expenses.
If you trade your savings in for an annuity then you are taking the bet that you will live a long time. The risks you are taking include 1) Annuity company bankruptcy 2) higher than anticipated expenses. You can diversify the risk of bankruptcy by purchasing policies from different solid insurance companies, but some risk is still there.
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