Stanford Wonk Argues In Favor Of Levered Equity Funds

My latest for Alpha Baskets looks at a kind of unique idea for portfolio construction that includes liberal use of levered ETFs. The idea is similar to ideas from some other people that we’ve looked at before–specifically from Nassim Taleb and Zvi Brodie. A long-time reader sent a link to an article from Forbes titled Leverage Your Way To A Richer Retirement. The article considered research done by Jason Scott at Financial Engines which looked at completely revamping the 4% rule (the 4% rule pertains to the optimal withdrawal rate for a retiree take from their portfolio without exhausting their funds). Scott’s portfolio is called the floor leverage rule and the basic idea put forward is to put the vast majority of the portfolio into bonds or perhaps TIPS to guarantee some minimum level of income from the portfolio. The suggested allocation was 85%. Please click through for the entire...

Investor Refresher (An Intersection of Investing and Firefighting)

My latest post for Alpha Baskets looks at an aspect of behavioral finance with an example from the firefighting world that popped up when I took my EMT refresher. It’s the type of behavior we’ve all had at some point even if not with investing. Like many firefighters I am an EMT. EMTs are on a two year cycle where they must accumulate 48 hours of continuing education and go through a 24 hour refresher class. Earlier this month I took the refresher with two other firefighters from our department. The process turned out to be far more involved than we realized. Essentially we crammed the entire EMT semester (the class people take when they first become an EMT) into three days of classroom time and then took the same final exam required after that semester-long class. Please click through to read the entire thing. The picture is of Walker Fire Water Tender 82 and Prescott National Forest Engine 930 staged for mopping up the Green Gate Fire last...

If You Can’t Retire at 30 Then How About 38?

As a followup to the post from a couple of weeks ago about a couple in Colorado who recently retired at 30, we look at a couple now 61 who retired at 38. Although they still probably have many years left, so far their strategy is working. MarketWatch then found another couple, Billy and Akaisha Kaderli, now 61 who “retired” when they were 38. There are some similarities in the two stories; both couples live frugally and both couples figured out early on what they wanted their lives to be and had the discipline to make it happen. Please click through to read the rest. The picture is from a car show we went to when we were back east in...

Weekly Market Update

One of my regular blog posts for AlphaBaskets is a Weekly Market Update which looks at macro events moving markets, ETF industry news and then a couple of what are hopefully interesting items that are not necessarily market related but can be. The week we looked at the suspended debt ceiling and the speed skating suit controversy at the Olympics. You can click through here to read the whole thing. The picture is from Yosemite National...