The Stingy News Weekly: 02/07/2020
Stingy News Flash
My friend David Aston recently published a retirement guide for Canadians. You can get a copy of the book at Indigo or Amazon. Here's how he describes his work.
The Sleep-Easy Retirement Guide:
Answers to the 12 Biggest Financial Questions that Keep You Up at Night
The Sleep-Easy Retirement Guide sets out to help middle class Canadians answer the big, pressing financial questions associated with retirement including figuring out: how big a nest egg they'll need; how long they will need to continue to work; how much they can draw from their portfolio each year in retirement; how much they will need to spend to get the retirement lifestyle they want; and when they should start drawing government pensions.
The book has a practical bent towards helping Canadians figure out their key objectives in concrete terms with actual numbers. For example, using common assumptions that the author describes, he will help you figure out just how big a nest egg you should generally have if, say, you're a couple planning to retire at age 65 while spending an above-average $80,000 a year combined in retirement. (In that case, the size of nest egg required is over $1 million, although he makes it clear that you can still expect a fulfilling retirement if you have far less money to spend.) He includes a chapter with eight case examples and statistics on average seniors spending to help provide you with a sense of the over-all standard of living that you can expect at different spending levels. He provides statistics to show that average seniors spending (with a few adjustments that he makes) is only $65,000 a year combined for couples , and $43,000 a year for senior singles.
While the book deals broadly with retirement planning, there is a chapter on investments that might be of particular interest to do-it-yourself investors who are retired or nearing retirement. In this chapter, the author discusses investment strategies designed to help generate dependable cash flow that can meet your spending needs in retirement while helping to insulate you to a degree from the ups and downs in the market. In addition to discussing the role of well-known basic investment principles such as setting an appropriate equity/fixed income asset allocation, he also discusses more specialized strategies such as: income investing using reliable dividends and interest; structuring your portfolio using a 'bucket' strategy; and converting part of your portfolio to annuities.
The author has written freelance articles for MoneySense, the Globe and Mail, Morningstar.ca, and has recently started writing a regular column for the Toronto Star. He has a chartered financial analyst designation and an M.A. in Economics.
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"the biggest lie in personal finance is that you can be rich if you just cut your spending." [Thrift]
Liquidity and factor returns
"We observe that the performance of the factor decreased consistently as the minimum liquidity constraints increased. This result can be explained by cheap stocks frequently being small stocks, i.e. having exposure to the Size factor. Removing these small and cheap stocks led to lower factor performance." [Value Investing]
The temptation of cash
"How long do you usually have to wait before you would reach the absolute lowest price for any given trading day? The median amount of time before hitting an absolute low is 184 trading days (~9 months), but the average is 508 trading days (~2 years)." [Markets]
The wager revisited
"The best yardstick for success isn't whether you beat a benchmark, or your neighbor, or your brother-in-law. Instead, the best measure of success is whether you meet your financial goals - while also sleeping at night." [Buffett]
Five investing heresies
"Dan Rasmussen proceeds to knock down five investing heresies" [video] [Markets]
S&P/TSX60 Value Screens
DOW 30 Value Screens
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