Friday Reading: The Flight Path Approach to Asset Allocation

By Harry Sit

Interview with Vanguard’s John Ameriks about Target Retirement Funds by Mike Piper at Oblivious Investor

Mike interviewed Vanguard’s head of Investment Counseling and Research Group John Ameriks about Target Retirement funds. Mr. Ameriks gave very good insights into what a fund company thinks about when it offers target-date funds.

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The Flight Path Approach to Age-Based Asset Allocation by Rick Ferri at RickFerri.com

Investment advisor Rick Ferris suggests that investors shouldn’t just stick to the same target-date fund at all times. Instead, invest in a more conservative fund at first, ease into a more aggressive fund as time goes by, and then taper off. It makes a lot of sense. When you don’t have a lot of money invested, being aggressive doesn’t help that much even if the market does well. Rick also wrote a follow-up: Perils of Crashing Through Risk Tolerance.

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Investing During Bear Markets by Mike at Long Term Returns

Why is it so difficult to plunk down a lot of money at the market bottom? Good question. I asked a similar question in What Did You Do When the Market Was Down? 

My theory is that the short-term negative feedback is too strong when you chase the bottom or catch a falling knife. When the market drops 10%, you say "Great, I buy stocks on sale." When it drops another 10% you buy more. When it drops another 20%, you pause because you already exacerbated your loss and you don’t want to inflict more pain. That’s when the stock market is really on sale and most people miss it.

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Book Review: The Chinese Way to Wealth and Prosperity by Jim Blankenship at Getting Your Financial Ducks In A Row

A new book purports that the Chinese has a special way to wealth and prosperity. I don’t think so but I’m curious enough to find out. I placed a hold at my library.

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Ally Bank CD Rate Loyalty Bonus – Discontinued? by Michael at Financial Ramblings

After requiring consent for early withdrawals, Ally Bank is discontinuing the customer loyalty bonus on CDs? Don’t worry, because …

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Big Rate Increases For Some of PenFed CDs by Ken Tumin at DepositAccounts.com

Pentagon Federal Credit Union (PenFed) becomes the new rate leader in 1-, 2-, and 3-year CDs. Everyone can join PenFed by making a one-time donation to a charity.

You still lose to inflation in these CDs. So buy I Bonds first. By the way the rate on EE bonds is cut from 0.6% to 0.2%. It doesn’t matter if you are holding 20 years.

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Posted on November 2, 2012 under News. Keywords: , , , , .

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