Archives
Concentration vs. Diversification
Concentration vs. Diversification This topic on “concentration” was triggered by a number of recent articles about managers focusing on concentrated portfolios, the latest a blog by Jonathan Chevreau on “Steadyhand- A fund family for mutual fund sceptics” . Chevreau talks about Tom Bradley’s new actively managed five -fund family which differentiates itself by charging reasonable […]
‘Core-Satellite’ Investment Approach
‘Core-Satellite’ Investment Approach (Originally posted December 13, 2007; re-posted in 2012) The debate about advantages of active vs. passive investing should be over. The overwhelming evidence suggests that it is extremely difficult to beat the indexes on a sustained basis, especially after management expenses, and it just as difficult to identify a priory who will […]
Structured products I
Structured Products I In my September 30, 2007 Hot Off the Web, I mentioned John Authers of the Financial Times in “Structured vehicles may be way forward” discussing how, in the wake of the relatively poor recent performance of hedge funds and private equity, the emphasis may be shifting away from hedging to guarantees in […]
Longevity Insurance (Delayed Payout Annuities)
Longevity Insurance (Delayed Payout Annuities): Forget About Immediate Annuities- The Most Efficient Annuitization is 5-10% of Wealth Allocated to Longevity Insurance! Scott, Watson and Hu in their Pension Research Council paper “Efficient Annuitization: Optimal Strategies for Hedging Mortality Risk” prove what readers of this website have heard from me many times before (though expressed only […]
Annuities IV
Annuities IV So there are no simple rules to decide if an annuity is appropriate for you. As a general statement, I can see no compelling reason to start considering annuities as part of a retirement plan, until there is better disclosure of the fees and charges that go into the pricing of annuities […]
Annuities III
Annuities III So after having done some preparatory work on annuities in Annuities I and Annuities II , now let’s do a few scenarios with and without annuities.(There is also the Annuities IV blog the last in this series of four on annuities.) This blog is not the definitive but rather more like an introduction to annuities. […]
Annuities II: (Almost) Everything you wanted to know about annuities, but were afraid to ask
Annuities II: (Almost) Everything you wanted to know about annuities, but were afraid to ask In the Annuities I blog we discussed “what is (the measure of) wealth? Here we’ll discuss what annuities are, what flavours they come in and what are some their pros and cons. (Annuities III and Annuities IV are the remaining two […]
Annuity I: What is wealth?
This blog (originally posted in 2007) is the first of a number of blogs pertaining to annuities and their role as longevity insurance. (There are couple of follow-up blogs that you might also be interested to read on annuities at Annuities II: (Almost) Everything you wanted to know about annuities, but were afraid to ask, Annuities […]
Hedging foreign currency exposure
Hedging of foreign currency exposure: To do or not to do? As the Canadian Dollar hits parity with the U.S. dollar, more investors and newspapers are talking about currency hedging. An example of currency hedging is when a Canadian investor who invested in say the U.S. market is concerned that her U.S. dollar returns will […]
Universal life
Universal Life Insurance: Are there tax advantages? YES; is it advantageous for your wealth? UNLIKELY! (Originally published October 27, 2008) What is a Universal Life Policy? It is a combination of term insurance and an investment vehicle which is tax-deferred to the investor or even tax-free on death to the beneficiary of the estate. Situation […]
RetirementAction.com 