Retirement Readiness Shows Signs of Waning

While the retirement systems in the United States, the United Kingdom, and Australia differ in important ways, all are falling short to varying degrees in ensuring that workers in those countries are adequately preparing for retirement, according to an article published by human resources consultancy Findley Davies in its November/December 2017 newsletter. Retirement Readiness The article, “Retirement Readiness—How Do We Compare?” was written by Ken Hohman, an actuary and management consultant. Hohman presented a comparison of the retirement systems in these three countries based on his involvement on behalf of the American Academy of Actuaries with a project in collaboration with the Actuaries Institute in Australia and the Institute and Faculty of Actuaries in the UK. Hohman observed that Australia, the UK, and the U.S. have similar but significantly different retirement systems. Specifically, he explained, each country has a national social security system that is weighted in favor of lower-income …

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Dollar Cost Averaging Creating Good Money Behavior

The increase in volatility to start 2018, coupled with the almost 9-year bull market run has caused many sophisticated investors to question when to buy and when to sell. So, it’s important to remember that there is a very simple investment strategy that doesn’t require you to stare at trading screens all day – Dollar-Cost-Averaging. It isn’t new and exciting, but many a successful investor has proven its worth. The principal behind it is this: You put the same amount of money into the same investment on the same day each month. Those months when the investment’s price goes up, your set amount does not buy as many shares. But when the investment‘s price dips, you get to buy more shares at a cheaper price. Guess what? When the price goes back up, all those shares you bought cheaply make you some money. Those shares you bought when the price …

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What is Keeping Financial Advisors Up at Night? A 2018 Outlook

Last month, I recapped our growth in 2017, which we followed with a press release detailing what topics and trends our readers were interested in throughout the year. In the release, we noted that financial advisors are the fastest growing audience on Harvest. This group now accounts for nearly 70,000 monthly active users, over 300% more than a year prior. According to our data, two trending topics that stood out to advisors on our platform were “robo” platforms and practice management. To me, this suggests that advisors have been reconciling not only with how best to manage client portfolios, but also simultaneously trying to justify their existence. One month into the new year, here is how I see these trends playing out for the remainder of 2018: Robo-Advisors Robo-advisors are projected to manage $385 billion of client assets by 2021, according to Cerulli Associates. Betterment, Personal Capital, and Wealthfront were the pioneers …

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Millions, Billions, Trillions: How to Make Sense of Numbers in the News

National discussions of crucial importance to ordinary citizens – such as funding for scientific and medical research, bailouts of financial institutions and the current Republican tax proposals – inevitably involve dollar figures in the millions, billions and trillions. Unfortunately, math anxiety is widespread even among intelligent, highly educated people. Complicating the issue further, citizens emotionally undeterred by billions and trillions are nonetheless likely to be ill-equipped for meaningful analysis because most people don’t correctly intuit large numbers. Happily, anyone who can understand tens, hundreds and thousands can develop habits and skills to accurately navigate millions, billions and trillions. Stay with me, especially if you’re math-averse: I’ll show you how to use school arithmetic, common knowledge and a little imagination to train your emotional sense for the large numbers shaping our daily lives. Estimates and Analogies Unlike Star Trek’s Mr. Spock, scientists and mathematicians are not exacting mental calculators, but habitual …

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The Huge Decline in U.S. Publicly Traded Companies

The Huge Decline in U.S. Publicly Traded Companies: Why investors should be worried Financial advisors spend a lot of time reassuring clients. Yes, interest rates are rising, but they are still at historical lows – the markets will be fine long-term. Yes, the technology sector is on a tear, but there are significant differences from the technology bubble from the late 90s – the markets will be fine long-term. Yes, the U.S. dollar declined last year for the first time in 5 years – the markets will be fine long-term. But there is one 20-year trend that has financial advisors worried about the markets long-term: the sharp decline in the number of publicly traded companies here in the U.S. The Worry In 1996, the US stock markets boasted over 8,000 publicly traded companies. Today, that number has dropped to less than 3,500. Let’s go back further and add the US …

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