Why You Really Didn't Blow Your Chance To Retire.

In a May 2nd, post on Motley Fool @msnbc. com, the authors try to convince us that we've missed a huge opportunity, perhaps a once in a life time opportunity, to provide for our financial futures because we were under allocated to stocks and/or didn't contribute enough to our retirement plan.

As is often the case, the authors help us understand the error of our ways by noting that we need to be fixated on making the most amount of money that we can on any day, at any given moment and in any given market. AND, true to form, they manage to provide us with some (suspect) remedies which, as you might imagine, play perfectly into "creating transactions" game which keeps Wall Street running. If you missed your best chance to create a sustainable retirement, you can fix it by simply [a] contributing more to your retirement plan and [b] picking some bullet proof stocks. Wait a minute, there are bullet proof stocks? Oh, ok, there are lists of bullet proof stocks (and funds, and UIT's and bond funds, and hedge funds, and can't miss land deals) but not actually any bullet proof stocks, just lists of them.

Ironic that the one salient theme would actually work, to monitor what you pay for your investments because overpaying results in almost guaranteed returns, even made the list. Odd that the one metric that might actually ensure that you make some progress came in third. That's sort of like telling Titanic travelers that they should [a] buy some floaties, or; [b] buy some long underwear and lastly, stay home. They're all good recommendations but an appreciative re-order of those recommendations seesms in order to me.
Amazing it is that you can write an article about the fall of someone elses retirement and never mention either RISK or GOALS? How exactly does that work?

Lest we forget, 2008 came about in world where RISK and GOALS weren't important. Greed was.
When you're "success" is measured in whether or not your greed was satisfied any successes you have will be short lived.

You'll blow your chance at retirement if you can't define what it is or how much it will cost.

As noted many times in my blogs; if you don't know what it will cost, you can't tell how much it will take to fund it. No amount of contribution will ever be "right" unless you know how much you need and no "investment selection" will ever be right until you know the rate of return you need to fund your goals.
If pension plans can take too much risk and wind up either overfunded or under-funded, why can't you?

Are Fund Managers Ever Worth The Cost?

One of our core beliefs is that investors should always pay attention to the expenses of their investments. Every dollar needlessly spent chasing returns is a dollar that should be in your pocket not someone else's.

Reducing the money that you have at work by paying costs that don't directly result in bottom line benefits to you will hurt your chances of meeting your long-term goals.

A strategic decision for every investor is the passive v. active decision and this is where one decision can save a lot of money over time. And, because we're talking about expenses, the savings are a sure thing.

In theory, investors pay for active management because a manager will use their skill in security selection to outperform and index such as the S&P 500. Well, the cost of trading, research and such all raise your bottom line costs, perhaps to an unconscionable level.  

Does this additional cost result in additional returns? No, according to CNBC.com in this recent article "Market Pros Had a Bad Year, So Why Not Buy and Index Fund?"

Are you paying too much for your current investment program? Want to find out for certain if you are or not? Use our Connet With Us form to let us know, we'll contact you to arrange a mutually convenient time to meet. Our evaluation is done on a no-cost, no-obligation basis. 

Fear and the Debt Ceiling

Emotions continue to get in the way of our making sound investment decisions. The Debt Ceiling was no different and should yield lessons for us all.