Friday, August 12, 2016

Short Takes: Skewering Market Pundits, Poor Market Timing, and more

Here are my posts for the past two weeks:

Do You Pay Investing Fees?

Is Your Allocation to Stocks Too High?

Here are some short takes and some weekend reading:

The Reformed Broker tears a strip off market pundits who make extreme predictions.

The Irrelevant Investor explains that the S&P 500 has gone up at 18.08% per year for the last 7.5 years, but investors in SPY (an S&P 500 index fund) earned only 11.82% because of poor market timing. Over the entire period, this is a difference of about a factor of 1.5 in invested assets, although the author is being somewhat misleading saying the difference is 115%. The article is very interesting despite this blemish.

My Own Advisor has decided on a goal of being financially independent by age 50. I’d say his plans look more reasonable than many early retirement enthusiasts. I’ve seen people hoping to retire in their 30s assuming their current spending level will not change in the future. Some margin for potentially higher future spending is needed. How can a 30-year old know how he’ll want to live at age 60?

Robb Engen has decided to push back his planned date of financial independence to age 45. I never had a target date for becoming financially independent; I just worked at it steadily. Each of us finds motivation in different ways.

Million Dollar Journey explains how he saves money on family vacations.


  1. Robb Engen keeps pushing his retirement date further and further away into the future. Even at 45, his assets will not be sufficient to pay for his retirement, unless he spends more than 5% - 6%/year. He needs to push his target date to 50, just like Mark

    1. @Robb: I haven't see enough detail about Robb Engen's plans to have an opinion about how realistic retirement at 45 is. However, just about everyone I know who sets a date ends up delaying that date. Perhaps this makes it easier to keep plugging along, just like a runner who says to himself, "just keep going to the next corner," and then tries to continue to the following corner.