Lowered Returns Demand Lowered Expectations — Richard Marston

Posted by Linda Corman, guest contributor on Apr 3, 2019 3:12:13 PM

The robust returns of the postwar decades are history and alternative investments can’t make up the difference, so investors need to adjust to a new world of lower returns, according to Richard Marston, a finance professor at The Wharton School of the University of Pennsylvania. Marston was a principal speaker at Investments & Wealth Institute’s recent Investment Advisor Forum.

Spending plans for retirement and endowments up until recently have been based on returns attained in the five decades following World War 2, Marston said. On the basis of real returns averaging 2.5 percent for fixed-income investments and 7.1 percent for equities, retirees were advised that spending 4 percent of their principal annually would preserve their corpus.

Using these return assumptions and a $100 million endowment spending at a 3 percent rate as an example, Marston said there was a 25 percent chance of increasing the corpus to $263 million in the first 20 years in inflation adjusted returns. There...

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Topics: investments, wealth, retirement

The Healthy Tortoise Economy Will Amble On — David Kelly

Posted by Linda Corman, guest contributor on Mar 26, 2019 6:30:00 AM

Although global growth will slow in the coming year, what is already the longest expansion ever will continue, according to David Kelly, chief global strategist and head of the Global Market Insights Strategy Team for J.P. Morgan Asset Management. Kelly was a principal speaker at Investments & Wealth Institute’s recent Investment Advisor Forum.

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Topics: retirement, retire

Shifting Client Conversations from Yield to Cash Flow

Posted by Admin on Aug 8, 2018 6:00:00 PM
When meeting with financial advisors, we’re consistently hearing concerns that retirees may feel challenged to generate sufficient income to meet everyday expenses in this low-interest-rate environment. As a result, they may be tempted to pursue certain high-yielding investments, without fully understanding their associated risks. But yield, of course, is only one form of income, and it should not be the sole focus of a retirement income strategy.   We found that investors looking for income...
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Topics: investments, economy, wealth, retirement, retire

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