Please Help Me Find The Best Name

I’m creating an internet course to help people know which questions to ask about retirement before they start worrying about the answers.

Part of the process is to register a domain name for everything related to the course. I’ve come up with four possible names. There were several others but they were already taken or someone wanted $XXXX.00 to buy them.

So I found a site that helps you create a poll to send to people you know. There are four names below. Please select the one that resonates most strongly with you.


Many thanks!


Global Markets: Traders Put Record Cash To Work

My Comments: I recall a saying to the effect ‘pride goeth before a fall’. Rampant enthusiasm about investing across the market spectrum probably suggests the same thing. Of course, there’s always a follow up question about how much pride is necessary to trigger a fall. Just know that one is coming and if it concerns you, there are remedies.

Joe Ciolli  /  Jul 23, 2017

In global markets, all signs of sentiment are pointing up. And it’s that very unbridled enthusiasm that could spell their downfall.

But before we get into the negative implications, let’s take stock of everything that shows just how overtly bullish investors are feeling right now.

First, private client cash levels have dropped to a record low as a percentage of total assets, according to data compiled by Bank of America Merrill Lynch. That means investors are feeling more emboldened than ever to put that money to work in the market. They’re choosing that over holding money on the sidelines — a risk-averse move typically associated with uncertainty.

Institutional investors are also holding the lowest levels of cash since the start of the eight-year bull market, survey data compiled by Citigroup show. The measure now sits at less than one-third of a multi-year high reached in 2016.

Second, active equity funds just absorbed their biggest inflows in 2 1/2 years, according to BAML. This is a sign of confidence not just for the market, but for fund managers that make their living picking stocks. It’s a rare bright spot for active management, which has struggled alongside the rise of the red-hot ETF industry.

Third and lastly, in perhaps the most direct reflection of swelling confidence, global markets are hitting records. The S&P 500 and its more tech-heavy counterpart, the Nasdaq 100, hit all-time highs this past week. The gauges are up 265% and 466%, respectively, over the course of the bull market.

Meanwhile, credit indexes have done the same amid 30 straight weeks of investment-grade bond inflows, BAML data show.

What’s resulted is the so-called “Icarus trade,” which has been characterized by the “melt up” seen in risk assets since the start of 2016.

But there’s a downside to flying too close to the proverbial sun — sooner or later, your wings will melt. BAML sees that happening in the second half of the year as the bullish conditions outlined above overheat further.

A “big fall in markets” will be an “autumn, not summer event,” strategists at Bank of America Merrill Lynch wrote in a client note. “Icarus won’t soar forever.”

The comments echo ones made by BAML the week before last, when they cited central bank tightening as a threat to the gradual trek higher in risk assets.

So where do we stand right now? Despite the gloomy late-2017 forecast from BAML, it’s actually a great time to be an equity investor. Company stock prices are moving more than ever on the earnings reports that are trickling out, representing a big potential windfall in the short-term for traders willing to do their homework.

How Much Will Social Security Benefits Increase In 2018?

My Comments: Those of us alive in the 70’s and early 1980’s recall a time when inflation was so high it dominated any economic discussion.

Those of us still alive today and getting Social Security benefits enjoy the increase that sometimes happens every year in January. It’s a cost of living adjustment or COLA. In 2016 is was 0.3% which didn’t amount to didly squat. This year it might be a little higher.

Tipswatch \ July 24, 2017


  • News media widely reported that a 2.2% increase in Social Security benefits is likely in January 2018.
  • How is the COLA determined and how could anyone project it in early July?
  • We need three months of data – inflation for July, August and September – to know the answer.

My wife and I were on vacation last week, eating breakfast at an Interstate hotel in southern Wisconsin. She read me a line from a USA Today story: “Social Security benefits projected to rise 2.2% in 2018.”

“What?” I nearly spit out my artificially-processed scrambled eggs. “How can that be? Inflation is running at 1.6% and we’re only halfway into the year. Wouldn’t this number come out in October or December? How can it be 2.2%?”

The article noted that the 2.2% number was a projection by the Social Security trustees, but that “officials will release the official cost-of-living increase for Social Security recipients in October.”

So I realized I had a lot to learn about Social Security and its annual cost of living adjustments (COLAs). My wife and I aren’t collecting Social Security yet, but I do track inflation every month. I wanted to know more.

The Weird Index
Social Security COLAs are based on the Consumer Price Index For Urban Wage Earners And Clerical Workers, otherwise known as CPI-W. It is similar to CPI-U (the “headline” inflation that you read about every month) but includes information only from households with at least 50% of the household income coming from clerical or wage-paying jobs.

CPI-W isn’t widely tracked, but the Bureau of Labor Statistics does update the index each month in its overall inflation report. In June, for example, the index was set at 238.813, for a 12-month increase of 1.5%, a bit lower than overall U.S. inflation.

I repeat: CPI-W increased 1.5% over the last year, less than overall inflation. Hard to see where we are heading toward a 2.2% benefits increase in 2018, but my research continues …

The Weird Formula
The Social Security Administration doesn’t look at a full year’s data to determine the COLA. Instead it uses the average index for the third quarter – July, August and September. Here is the language from the SSA site:
A COLA effective for December of the current year is equal to the percentage increase (if any) in the average CPI-W for the third quarter of the current year over the average for the third quarter of the last year in which a COLA became effective. If there is an increase, it must be rounded to the nearest tenth of one percent. If there is no increase, or if the rounded increase is zero, there is no COLA.

This is interesting wording, because it means that the SSA eliminates years where inflation was zero or negative, meaning there won’t be a “bounce-up” effect on benefits after a year of deflation. Instead, it goes back to the last year where there was an increase in benefits.

This happened in 2016, because there was negative average inflation in the third quarter of 2015 (and thus a 0.0% benefit increase in 2016). So when the 2016 benefit was determined (to take effect in 2017), the SSA compared the third-quarter averages of 2016 and 2014. Here is that formula:
(235.057 – 234.242) / 234.242 x 100 = 0.3 percent.

Benefits increased 0.3% in January 2017, and now the 2018 benefit will be determined by comparing the third quarter of 2017 with the third quarter of 2016 to determine the benefits increase starting January 2018.

Here are some historical numbers and my analysis of the current year’s trend:
Based on these numbers, a 2.2% benefits increase in January looks unlikely. If inflation remains stable over the next three months, the increase would be 1.6%. If it rises 0.1% each month, the increase would be 1.8%. And if it rises 0.2% each month, the increase would be 2.0% (In June, the index rose 0.08% before rounding. In May, it was 0.07%).

So why did we get a slew of news reports last week predicting a 2.2% increase in Social Security benefits in January? (Even the AARP reported the projection). The SSA trustees did issue their annual report on July 13, and it included projections that showed 2.2% as a “medium” outlook for the January COLA. But keep in mind that these projections were made before the third quarter began. There isn’t a single data point to support that projection. And if you follow inflation like I do, you know how unpredictable it can be from month to month.

Digging deeper into SSA data, I found a chart showing the half-year average CPI-W inflation numbers, which were up 2.2% in the first half of 2017. Interesting, but the COLA is based on inflation in three months – July, August and September – that aren’t in the first half of the year. So that number is irrelevant.

Last year, in their July 2016 annual report, the trustees projected a 0.2% COLA increase in January 2017. That number turned out to be 0.3%. Pretty close, or off by 50%?

I’d admit that the COLA could end up being 2.2% in January 2018, or it could be lower. Or even higher. I’ll also note there are no data – at this point – to support an accurate projection. We’re going to need to see inflation numbers for July, August and September.

The SSA says it will release the official number in October. I can tell you the exact date and time: Friday, October 13 at 8:30 am. That’s when the September inflation numbers will be released and then – and not until then – we will be able to say with confidence what the January 2018 COLA will be.

The Easy Guide to Growing Your Money — Florida Wealth Advisors

My Comments: I teach that investment risk is OK if you also have the ability to manage that risk. That happens if you have the discipline necessary to develop a rudimentary level of financial literacy. Reading these words from James Dennin is a good start. On the right side of this page is a link […]

via The Easy Guide to Growing Your Money — Florida Wealth Advisors

The Easy Guide to Growing Your Money

My Comments: I teach that investment risk is OK if you also have the ability to manage that risk. That happens if you have the discipline necessary to develop a rudimentary level of financial literacy. Reading these words from James Dennin is a good start. On the right side of this page is a link that allows you to schedule a phone conversation with me if you are so inclined.

By James Dennin \ January 11, 2017

When it comes to the stock market, young people are getting seriously mixed messages.

On one hand, you maybe know you’re supposed to own stocks — or at least you know that when your money goes into a retirement account like a 401(k), a good portion of it should be going into equities, aka the stock market.

At the same time, fearful memories of the financial crisis and the people who lost everything in the market downturn still loom large: Only 52% of Americans hold stocks according to Gallup, matching a record low.

Are these stock-shy Americans behaving irrationally?

There’s no doubt that the risks of investing in stock are real, if sometimes overblown. And it doesn’t help that for every person claiming the market is safer than ever is another sounding the alarm that the sky is falling.

But the short answer is yes, Americans and especially millennials need to hold more stocks than they currently do — not just to meet retirement goals but also to start building wealth outside of their paychecks. And when you’re investing for the long term, you can actually tune out much of the the day-to-day noise. So, to get started, turn off the news — and focus on the basics.

The very first step in becoming an investor is learning the terminology.

Start with “ticker symbols”: those little one- to five-letter symbols running across the bottom of CNBC. Stock brokers invented ticker symbols to save space on the little streams of paper that printed out the latest quotes. Not exactly of great use to would-be stock traders in the digital age.

Some of these are fairly intuitive. If you wanna buy Apple stock, you look for the symbol AAPL. Some are a little trickier to spot. Macy’s, for instance, is just M. Some really try to be clever, like the Sealy corporation, which sells mattresses and trades under the symbol ZZ. And funds (like Vanguard Total Stock Market, aka VTI) that hold bundles of stocks have tickers, too.

It’s good to know what tickers are in general, but you don’t have to go around memorizing them. Indeed, the fact that traders still use this shorthand is a vestige of history that makes investing seem more impenetrable than it is.

So what should you be focusing on? And how do you get started?

Let’s say you’ve already taken some super preliminary steps: You’ve paid your rent and funded your 401(k), you’ve put away a few months expenses into your emergency fund, and you still have about $1,000 (or even just $100) left to play with this month after food and fun.

It’s easier than ever to put that cash into the stock market, by setting up accounts with cheap, low-to-no-minimum online brokerages like OptionHouse (or free ones like Robinhood).
But before you start buying stocks or funds willy nilly, you have a little more homework to do: To help you figure out what to buy, here are 3 major “investing 101” terms you need to know, and what they mean.

1. Diversification
Diversification is a very simple idea that steers a lot of decision-making in the investing world; it is essentially how people try to manage and mitigate risk when they invest.
To use an example, the best way to get rich quickly in the stock market in one given day or year might be to put every cent into one company.

If you were investing on Dec. 7, 2001, one of those stocks would have been Enron. Shares of Enron stock quadrupled — meaning investors got a huge payday — after it emerged from bankruptcy, even as most analysts agreed that the shares weren’t even as valuable as the paper they were written on.

Thing is, many investors didn’t realize they were sinking their cash into what would become one of the most scandal-plagued companies of the decade. If you were unfortunate enough to buy many shares of Enron stock when it was at its peak price of $90.75? You might have then seen your savings wiped out when the share price fell to $0.67.

In other words, buying stocks is like betting, and with single stock bets you can win big — but you can also lose big. Diversification is about finding a middle ground: If you hold more than a single stock (or even a single type of stock), you’re more likely to balance bad bets with good ones.

A diverse portfolio should have a mix of stock styles and types — as well as non-stock assets like bonds. Your stock holdings should include a diversity of industries (so, not just tech stocks) and geographies (not just American companies), as well as a mix of value and growth stocks, a mix of small- and big-company stocks.

The thinking is that what’s good for some assets is always going to be bad for some others — and vice versa.

Want diversification the lazy way?

Find three low-cost, diversified funds that include hundreds of stocks (and bonds) across industries and geographies. Then set it and forget it.

2. Price-to-earnings or P/E ratio
The 12-month trailing price to earnings ratio (or the forward P/E ratio, if you’re using projected estimates) is probably the second most important concept to understand, since it’s one of the most common ways traders try to determine how attractive a stock is.

Just like with cars, there are old stocks that no one really gets excited about — and there’s new names everyone knows as the latest hotness.

When a stock is popular, people are willing to pay more money for it. At the risk of oversimplifying it, the P/E ratio is essentially a way of measuring the hype factor and how much that is inflating prices above the underlying value.

To calculate the P/E, divide a stock’s price by the amount of money the company earns off of each share of stock. If a stock is trading at a high price relative to actual earning, there’s a decent chance it might be overhyped.

On the flip side, a stock trading well below the average historical P/E ratio of roughly 15 might be something of a bargain. That’s especially true since the current average P/E for the stock market is relatively high, at about 26.

To build on the previous section, the lesson here is to not just pay attention to the diversification of your portfolio but also the valuations.

There are exceptions to every rule of thumb, but avoiding inflated valuations (of which P/E ratios are one type) will help you become a better investor.

So pay attention to the average P/E of the stocks inside before you buy a fund. And remember that the overall average P/E for the stock market matters too — the whole thing could be historically overpriced at a given moment.

When the market takes a dip? That could be a buying opportunity.

3. Sharpe ratio
A final measure that will help you invest is what’s called the Sharpe ratio.

Very simply, it’s a means of calculating how attractive a stock or portfolio is, taking into account both how risky it is and how high your possible returns are.
In other words, it’s a way of calculating what’s called a “risk-adjusted return.”

Generally speaking, the higher the Sharpe ratio, the more attractive the rate of risk-adjusted return.

Conversely, if a company has a negative Sharpe ratio, it means that you probably could have gotten a similar return while also investing in less risky stuff.
To give you an example, the trailing 3-year Sharpe ratio for a Vanguard Fund for international dividend stocks is 0.66.

That’s lower than the 0.83 ratio for the S&P 500 over that same period, according to Morningstar. But it’s still a lot better than the Guggenheim Solar ETF (TAN), which has a Sharpe ratio of -0.51.

Does this mean you should never invest in international stocks or solar energy companies?

Not necessarily.

But if you are shy about risk, the Sharpe ratio is a helpful tool for sorting the biggest gambles from the smaller ones. At the end of the day, investing in the stock market is a type of gambling, no matter how “safe” your investment.

As long as you consistently remember that — and only invest with money you can afford to lose — you’ll be in a good place.

Because, just as with gambling, you could also always win.

The Danger From Low-Skilled Immigrants: Not Having Them

My Comments: To Make America Great Again, the presumably well intentioned mantra for those leading the GOP these days, someone has to overcome ignorance of economics and start paying attention to reality.

A positive corporate bottom line is the driving force for a healthy US economy. To reach that goal, we need people willing to spend time in the trenches doing whatever grunt work is necessary. Despite machines that increasingly automate the grunt work, a supply of young people has to match the demand created until artificial intelligence takes over.

The supply of labor is not going to miraculously appear. A greater number of us are old and fragile, and fertility rates among young men are declining. Exactly who is going to look after all us old folks because we refuse to hurry up and die?

We should be encouraging immigration and refugees. Yes, there is a potential security threat, which implies applying resources to screen and maintain a reasonable level of security. And yes, someone is probably going to get killed or maimed or whatever when someone nefarious sneaks through.

The laws of supply and demand are well known. Right now we have an increasing demand for labor, which can only stabilize with either more people being allowed into the country, or a large increase in the cost of labor to force more of into the trenches. Either that or starve, in which case you die. Some would have that happen since dead people are less likely to vote against those wanting to restrict immigration.

Eduardo Porter \ August 8, 2017

Let’s just say it plainly: The United States needs more low-skilled immigrants.

You might consider, for starters, the enormous demand for low-skilled workers, which could well go unmet as the baby boom generation ages out of the labor force, eroding the labor supply. Eight of the 15 occupations expected to experience the fastest growth between 2014 and 2024 — personal care and home health aides, food preparation workers, janitors and the like — require no schooling at all.

“Ten years from now, there are going to be lots of older people with relatively few low-skilled workers to change their bedpans,” said David Card, a professor of economics at the University of California, Berkeley. “That is going to be a huge problem.”

But the argument for low-skilled immigration is not just about filling an employment hole. The millions of immigrants of little skill who swept into the work force in the 25 years up to the onset of the Great Recession — the men washing dishes in the back of the restaurant, the women emptying the trash bins in office buildings — have largely improved the lives of Americans.

The politics of immigration are driven, to this day, by the proposition that immigrant laborers take the jobs and depress the wages of Americans competing with them in the work force. It is a mechanical statement of the law of supply and demand: More workers spilling in over the border will inevitably reduce the price of work.

This proposition underpins President Trump’s threat to get rid of the 11 million unauthorized immigrants living in the country. It is used to justify his plan to cut legal immigration into the country by half and create a point system to ensure that only immigrants with high skills are allowed entrance in the future.

But it is largely wrong. It misses many things: that less-skilled immigrants are also consumers of American-made goods and services; that their cheap labor raises economic output and also reduces prices. It misses the fact that their children tend to have substantially more skills. In fact, the children of immigrants contribute more to state fiscal coffers than do other native-born Americans, according to a report by the National Academies.

Retiring Early? Here’s How to Delay Taking Social Security Anyway

My Comments: I’ve you’ve not yet signed up to receive your monthly Social Security benefit, this is worth a read. I encourage everyone to try and wait until Full Retirement Age (FRA). The outcomes are likely to be much better.

If you claim Social Security early, your checks will be permanently reduced. Consider looking for income elsewhere so that you can wait until full retirement age.

Wendy Connick \ Aug 9, 2017

Sometimes retiring early is unavoidable. If you’re struggling with chronic health issues, or if you’re laid off from your job in your early 60s and see no prospect of getting another, it just makes sense to go ahead and retire. On the other hand, claiming Social Security early can put a serious crimp in your income later on: Starting Social Security payments before full retirement age means your benefits checks will be permanently reduced. But if you can scrape together enough income from other sources, you can wait to claim Social Security until the most financially practical time for you.

Here are five ways to fill the income gap between the day you retire and the day you start collecting retirement benefits.

Buy an annuity

If you retire early, it may make sense to take a chunk of money and use it to buy an immediate fixed annuity. These annuities pay you a set amount of money every month for the rest of your life. That makes them something of a substitute for Social Security, and if you have cash to buy a substantial annuity, you may be able to delay taking Social Security for years, thereby letting your eventual benefit amount grow.

A caveat: Annuities are complex products that come with fairly restrictive terms, so do plenty of research on your options before buying one. You can start by learning some of the basics HERE.

Construct a bond ladder

Bonds are an excellent source of guaranteed income in the form of interest payments — but the drawback is that in order to get a decent return on investment these days, you need to purchase fairly long-term bonds, which means your principal will be tied up for years and years. Bond ladders help you to get around this problem. To construct a bond ladder, you buy bonds with different maturity dates so that you will regularly have bonds reaching maturity and releasing principal back to you. As you get your principal back, you use it to buy new bonds and keep the ladder going. Another perk of bond ladders is that if interest rates go up, you’ll be able to take advantage of the new rates as you continually buy new issues to replace the bonds that have matured. While interest rates are quite low even on long-term bonds, a good bond ladder can provide a substantial amount of income.

Buy dividend stocks

With their exceptionally high long-term returns, stocks are an excellent money maker. However, in order to realize the income from a stock’s increased value, you have to sell it. An alternative way to get income from stocks is to buy ones that pay regular, high dividends to their stockholders. While dividends aren’t as reliable a source of income as bond interest payments, if you invest in dividend aristocrats — companies that have paid dividends for at least 25 consecutive years — then those payments are likely to keep coming, and increasing, for many years. This strategy works well for retirees, because dividend aristocrats also tend to be large, stable companies that are unlikely to suffer from high volatility.

Get income from your house

The above strategies require a retiree to have a substantial chunk of money at their disposal. If your accounts aren’t quite so well-funded, you might not be able to generate enough income from them to get by without Social Security. In that case, your house may be the resource you need to make up your income gap. If you have more house than you require, renting out a room might be an excellent source of income — especially if you live in a college town. A somewhat more permanent option would be to get a reverse mortgage on your house, but before you pursue this option, make sure that you understand all the consequences of doing so. Finally, if all you need is a little extra cash to smooth out your cash flow, a home equity line of credit can help.

Work part-time

The side hustle is an increasingly popular way to make money at any age, and the best side hustles are the ones you actually enjoy doing. Your favorite hobby might be just the thing to bring in some extra cash; it’s clearly something you enjoy doing, since you’re doing it now without being paid for it. You may be surprised by how many people would be willing to pay you for the fruits of your labor. So if you practice any sort of craft, from sewing to building bird houses, try setting up a shop on Etsy or a similar site and peddling your wares. If you love gardening, look for a local farmers market and figure out what it would take to set up a profitable booth. And if you have years of experience in a job that can be done without leaving a computer, then you may be able to find freelance work online. There are several websites that exist solely to connect freelance workers with companies that have a short-term need for help.

A side hustle likely won’t pay the bills on its own, but combined with the other options above, it could help you stay afloat until you reach full retirement age — and finally claim those Social Security benefits.