Say Goodbye To The 4% Rule?

My latest for Alpha Baskets considers a reassessment of the 4% rule and what a safe withdrawal rate might be in a world of low interest rates. From the post; A 4% withdrawal rate can still work but it has always been the case that 3.5% would be better and 3.0% would be better still. It is also not a good assumption to think you’ll never spend principal. If you have taxable accounts, a Roth IRA and a traditional IRA it likely will make sense to deplete an account for maximum tax efficiency and then move on to the next one which as I have said before will be uncomfortable at first. Please click through to read the entire...

Diesel Debacle

Last week was an incredible week for many reasons as discussed the Weekly Market Update. From the post; Biotechnology stocks have been under the microscope (yes, that was a pun) first for years of outperformance and lately weeks of under performance. The latest attention came from Candidate Clinton who Tweeted of price gouging after the Daraprim story broke (the $7.50 pill whose price was temporarily jacked up 5000%) and then offered a plan to cap the costs of prescription drugs. If this was not good for the drug companies broadly, the sector down by 5% on the week, then it was very bad for biotech with the larger biotech ETFs dropping close to 15% on the week. Please click through to read the entire post. There was a Corvette show in downtown Prescott this weekend....

Bear Market Coming? Bear Market Here?

My latest for Alpha Baskets looks at the start of taking defensive action and trying to assess whether a bear market has started. From the post; If your strategy involves taking defensive action around a breach of the 200 day moving average (DMA) you probably should have taken some action by now as the S&P 500 has been below that trend line for about a month. The reason I believe in this indicator is that a breach signals a problem of some sort with demand for equities, maybe a serious problem that leads to a large decline or maybe an insignificant problem that resolves in a day or three but if the market is going to down a lot it will breach the 200 DMA fairly early but not at the top. Please click through to read the entire...

Fed Day Resolves Nothing

The weekly Market Update is up at Alpha Baskets and includes the following; The FOMC was faced with a damned if they do, damned if they don’t proposition. Earlier in the year the committee allowed the belief that September would be the time to hike to take hold then as employment continued to improve in terms of the headline U3 rate, inflation and growth began to sputter and the Fed Funds Futures market assessed the probability of a September hike at 30% which argues that the market had not priced in a hike as many believed. But the Fed faces a credibility question as the World Bank urged the FOMC not to hike and before that the IMF did the same, did the FOMC acquiesce to these organizations? The answer is probably no but it is a valid question. Please click through to read the entire update. The picture is from this week’s training for Walker...

Learning From Target Date Funds Without Actually Using Them

My latest post for Alpha Baskets looks at target date funds starting to incorporate liquid alternatives into their strategies. I think this is an interesting comment on expectations for fixed income investing for the next few years…or longer. From the post; Yields generally fell for more than 30 years which is something that can’t be repeated from here. It would seem like rates have to go up from here even if we aren’t sure when that actually starts but even if that doesn’t happen, if rates churn around in the same narrow range that they have been for the last year or so then the dilemma of low yields still exists and the threat of higher yields would also still exist. Please click through to read the entire...