Reliable retirement planning is not an easy task. Throw in economic uncertainty and low savings rates and the well intentioned idea of saving for retirement can become an arduous task.
There’s more to retirement planning than tucking money away for your golden years. It’s about replacing your main source of income once you retire, with another source of income.
A long term approach to a successful retirement plan produces income, wealth creation, and capital growth. As it stands, retirement savings comes from three different sources: social security, pension, and investments.
The average American will receive an annual Social Security benefit of less than $15,000 a year. At present, only 50 percent of the U.S. work force is covered by an employer-sponsored pension plan; unchanged over the last three decades.
If retirees want to live on more than Social Security and pensions, they will need to find creative ways to enhance their retirement plan. That’s why a sound, diversified, investment strategy that encompasses stocks, bonds, mutual funds, real estate etc., are essential for ensuring you are more than prepared for retirement.
Historical Trends, Global Economic Factors Say Stock Market at Risk
What if I told you the best six months for investing in the stock market are drawing to an end? Not good news, is it? As we enter the second quarter, there is optimism based on the price action of the stock market in 2014. Yet as I mentioned, what is historically recognized as the best six-month period during the year for investing in the stock market, particularly the S&P 500 and Dow Jones Industrial Average, according to the Stock Trader's Almanac, is coming to a close at the end of April. With the S&P 500 having returned only 0.44% in 2015 (better than the 0.26% decline in the Dow Jones Industrial Average), can we really expect much for the stock market following what was supposedly the historically ... Read More
Four Tips for Retiring Wealthy
When it comes to creating an investment strategy, there are many things to consider. Getting back to the basics, there are four points that everyone must accomplish to get the biggest bang for their buck. 1. Reduce Credit Card Debt While many might not consider reducing credit card debt as an investment strategy, it clearly is., the reason being that you are paying a very high interest rate on that debt. It is not easy to generate massive returns in the stock market, so if one’s credit card interest payment were 20%, one would need to generate a bigger return than that in the stock market to justify not paying off that debt. Reducing or eliminating unnecessary credit card debt is an easy initial step to ge ... Read More
Why I Recently Turned Bullish on Gold Mining Stocks
A friend of mine asked me the other day about the best way to build a long-term investment strategy. This is a great question, but it’s also one of the most difficult ones to answer. Obviously, different people have various goals and objectives, especially when it comes to risks. For me, the way I put together an investment strategy is by looking to buy things when they are on sale, including stocks. Over the past couple of months, if you’ve been following my articles, you’ve likely noticed that I’ve started to become quite bullish on gold mining stocks. This is the classic investment strategy ... Read More
First Step to a Winning Investment Strategy
One of the more common themes that I keep reading about these days is the strength of U.S. economic growth. It’s important to get at least some understanding of the potential for economic growth, as this will impact your investment strategy. Recent data is definitely making me ask the question: just how strong is the level of economic growth in America? We all know that this holiday season was much weaker than expected for retail companies. Considering that consumer spending fuels the majority of economic growth in America, this is certainly not a positive environment for that sector—but that shouldn’t ... Read More
This Cheap Sector Set to Outperform in 2014
With the new year just beginning, many investors will begin looking at their portfolio and trying to figure out how to shift their investment strategy to include sectors that should outperform in 2014. One investment strategy I like to use during the beginning of the year is to look for a situation where fundamentals are improving, but market sentiment remains weak. At year-end, many times you will see tax loss selling occurring. Essentially, investors are selling those holdings that have gone down the most to crystallize the losses for tax purposes. This also presents an opportunity—if the long-term investment strategy is sound. One sector that has been hit hard is the precious ... Read More
Profit Play on the Great Disappearing “Corporate Earnings Growth” Act
As many of you already know, the gross domestic product (GDP) estimate for the third quarter came in above estimates at 3.6%, with most of the increase coming from higher inventory levels. But I would like to look at something slightly different than the inventory buildup. I think we are all aware of what happens when inventory builds and consumers don’t buy—corporate profits get hit. However, looking at the data a bit closer, there are more worrisome signs aside from excess inventory that are also pointing to tough times ahead for corporate profits. The S&P 500 has had a stellar run since its bottom in 2009. Part of the reason for this is that corporate profits have expanded t ... Read More
Three Steps to Overcoming Losses in a Declining Market
“What should you do when the house isn’t in order?” A good friend of mine asked this question back in 2011. At that time, key stock indices were plunging lower due to issues regarding the U.S. debt ceiling. There was uncertainty, and many wondered what would happen next. I remember this question now because the key stock indices nowadays are falling due to troubles in the emerging markets and there seems to be panic—similar to what we were experiencing when I first heard this question. When key stock indices are declining, instead of panicking and selling ... Read More
How Low Interest Rates Are Holding 144 Million U.S. Workers Hostage
Are the long-term retirement plans of working Americans being held hostage by the Federal Reserve? If the point of quantitative easing was to stave off a recession and spur jobs growth, I think it’s fair to say the Federal Reserve’s $85.0-billion-per-month money-printing scheme has been a failure. At the very least, I’m not so sure the money was well spent, and that the end does not justify the means. I enter as evidence almost $4.0 tril ... Read More
What You Can Learn from Missed Investment Opportunities
One of the basic rules that investors should follow when it comes to portfolio management is to not have a bias. What biases eventually do is either hinder investors from making better decisions or cause investors to not even recognize an opportunity that can take their portfolio to new heights. For example, take the Affordable Care Act, more commonly referred to as “Obamacare.” A friend of mine, who is saving for his retirement, has a bias when it comes to this topic. He says it’s not worth it for Americans, and it’s just another expense to add to the budg ... Read More
Three Easy Ways to Save for Retirement if You’re Self-Employed
Many dream about being self-employed; being their own boss, and making their own hours. But, being self-employed also means being responsible for your own retirement savings. Unfortunately, many self-employed Americans seem to have forgotten this or have maybe simply chosen to ignore it until a later date. That could be a costly mistake. At present, only 50% of the U.S. workforce is covered by an employer-sponsored pension plan, unchanged over the last three decades. Furthermore, 71% of small businesses with fewer than 25 workers do not sponsor a retirement plan. (Source: Lichtenstein, J., “Financial Viability and Retirement Assets: A Look at Small Business Owners and Private Sector Workers,” U.S. Small Bu ... Read More