13 June 2013

Weekend Reads for Financial Advisors: Retirement, Behavioral Finance, and Paul Revere

Posted In: Weekend Reads

There was a big story recently about “the cyber snooping of the US government” (as the FT‘s Gideon Rachman put it). Yes, I know it was THE story in the United States, but the more important story for financial advisers — the one that has implications for the well-being of millions of Americans — was a piece in the New York Times business section on the perils of retirement. These days, it seems, it’s tough to make do with a measly $1 million.

While the article didn’t break new ground, it certainly exposed a fault line. Now, more than ever, advisors and their clients need a thorough understanding of retirement planning.

At the 2013 Morningstar Investment Conference, which wrapped up on Thursday, John “Jack” Bogle reiterated prior comments that the US retirement system is a coming train wreck:

US retirement system is facing 3 train wrecks: SS underfunded; DB plans underfunded; too much flexibility in DC plan system -Bogle #MIC25

— Samantha Allen (@sallendigital) June 13, 2013

With that in mind, here are some recent articles on retirement, along with a few other interesting reads you may have missed:

Retirement

“For Retirees, a Million-Dollar Illusion” (New York Times)
Helaine Olen offers her take on the NYT story: “Retirement Savings: The Million-Dollar Myth.” (The Guardian)
@abnormalreturns asks: Does the United States need a mandatory retirement savings program? (Abnormal Returns)
Meir Statman offers his thoughts on mandatory retirement savings. (Financial Analysts Journal, PDF)
“Why Planning To Save More Tomorrow and NOT Today May Be A Better Approach” (Nerd’s Eye View)
“Using Your Health Savings Account for Long-Term Care” (US News)
@MichaelKitces, @RPSeawright, and @WadePfau weigh in on “The US Retirement Crisis: Essential Reading and Resources.” (Enterprising Investor)

Behavioral Finance

Do not bargain with round numbers. (Marginal Revolution)
Q&A on “Behavioral Portfolio Management: An Alternative to Modern Portfolio Theory” and a follow-up post, “Behavioral Portfolio Management: Emotions and Volatility Are Key to Successful Implementation.” (Enterprising Investor)
“Why You Never Learn From Your Investment Mistakes” (The Motley Fool)
“People Are Overly Confident in Their Own Knowledge, Despite Errors“ (Science Daily)
“Emotions and Financial Trading” (video via YouTube)
“Does Behavioral Investing Makes Sense Anymore?” (Context)
“What You Don’t Know About Your Portfolio May Help You” (Bucks)

Investing

“Smart and Stupid Arguments for Active Management” (Reformed Broker)

The Industry / Your Practice

Bob Seawright offers his view of the “Top Ten Benefits Of Financial Advisors, Besides Investment Returns.” (Nerd’s Eye View)
Bankers want twin-pronged attack on richest pickings. (Reuters)
“Trust: The Core of Client Relationship Management” (CFA Institute Annual Conference blog)

And Now For Something Completely Different

An amusing take on network analysis: “Using Metadata to Find Paul Revere.” (Kieran Healy)

Please note that the content of this site should not be construed as investment advice, nor do the opinions expressed necessarily reflect the views of CFA Institute.

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About the Author(s)

Lauren Foster

Lauren Foster was a content director on the professional learning team at CFA Institute and host of the Take 15 Podcast. She is the former managing editor of Enterprising Investor and co-lead of CFA Institute’s Women in Investment Management initiative. Lauren spent nearly a decade on staff at the Financial Times as a reporter and editor based in the New York bureau, followed by freelance writing for Barron’s and the FT. Lauren holds a BA in political science from the University of Cape Town, and an MS in journalism from Columbia University.