Weekend Reads for Finance Pros: myRA, Emerging Markets, and Women Investors
Over the past couple of weeks, two of the themes that dominated headlines in the US financial press were emerging markets and retirement, specifically President Obama’s “myRA” proposal.
Here are a few articles on both these topics, in case you missed them, along with some other interesting reads.
Retirement
- “MyRA: Not ‘Like a Roth IRA.’ It IS a Roth IRA” (Oblivious Investor)
- “The New MyRA Roth IRA Proposal: A Financial Planner’s Guide To Everything We Know So Far” — i.e., as of February 3rd. (Nerd’s Eye View)
- While there were plenty of stories on myRA, another retirement-themed back-and-forth caught my eye. First there was this: “A Pension Promise to Oneself,” published in the Financial Analysts Journal (login required). In short, “Saving for retirement is not hopeless. Well-run DB pension plans provided retirement income for generations. When plans failed, it is because they broke the rules. The same applies to individuals. By understanding a set of rules on how much to save and how to invest and then sticking to those rules — that is, by making a pension promise to oneself — retirement income goals can be met. Fulfilling this promise requires more saving than most people are accustomed to.” Just how much more? Twenty two times the annual income you want to earn when you retire.
- The research in the article prompted Jason Zweig of the Wall Street Journal to pen a column on the matter:
Retiring on Your Own Terms: @jasonzweigwsj explains why you should save 22 times the annual income you want to live on http://t.co/jzLPHTHtXW
— Lauren Foster (@laurenfosternyc) February 4, 2014
- And then Heidi Moore, the Guardian’s US finance and economics editor, weighed in: “Why the Multimillion Dollar Retirement Is Not for the Middle Class“
Investing/Emerging Markets
- In a previous post, I included a link to an article in the Atlantic that said that women take fewer risks with their money because they have less money — not because they are biologically more risk-adverse. Now the Economist explains why women investors appear to outperform men. Note the word “appear”.
- “Fear Be Damned: This Is the Time to Invest in Emerging Markets” (CNNMoney)
- “Everything You Need to Know About the Emerging-Market Currency Collapse” (The Atlantic)
- “The Future Still Belongs to Emerging Markets” (The Financial Times, subscription required)
- On the myth of the “fat pitch.” (Pragmatic Capitalism)
- Which resulted in this Twitter exchange on the matter:
The “Fat Pitch” Myth http://t.co/cQrgNwAz0m
— Cullen Roche (@cullenroche) February 5, 2014
@cullenroche A firm that is understandable to you, has a moat & shares are selling for < 75% of intrinsic value is a fat pitch. No myth.
— Tren Griffin (@trengriffin) February 6, 2014
@trengriffin If it were that easy wouldn’t everyone just do it? Wouldn’t we all be Warren Buffett?
— Cullen Roche (@cullenroche) February 6, 2014
@cullenroche Warren Buffett: “Investing is simple, but not easy.” Buying stocks in 2008 was not easy, especially emotionally. Read Klarman.
— Tren Griffin (@trengriffin) February 6, 2014
@trengriffin You’re a private equity guy though. IMO, I’d say you’re an “investor” in the truest sense of the word.
— Cullen Roche (@cullenroche) February 6, 2014
@trengriffin You provide capital for future production. The avg “investor” on a secondary mkt is just allocating savings into vehicles…
— Cullen Roche (@cullenroche) February 6, 2014
@trengriffin where the “value” has likely already been turned over by people with a real competitive advantage….
— Cullen Roche (@cullenroche) February 6, 2014
@trengriffin that’s why stock picking on a secondary market in a traditional buy and hold approach is usually a losing cause….
— Cullen Roche (@cullenroche) February 6, 2014
@cullenroche Buy at discount to intrinsic & hold ≠ buy and hold. What Warren Buffett bought in 08 was available in public markets. (1/2).
— Tren Griffin (@trengriffin) February 6, 2014
Economics
- “Do the Economic Facts Have a Conservative Bias?” (Noahpinion)
- “New Fed Chief Janet Yellen Lets a Long Career of Breaking Barriers Speak for Itself” (The Washington Post)
Behavioral Finance
- “Dilbert Does Behavioral Economics” (Psychology Today)
The Advisory Business
- “4 Key Ingredients for Your SEO Recipe” (FPA Blog)
- “Wealthfront Tax Loss Harvesting White Paper — A Case Study in How Not to Calculate Tax Alpha” (Nerd’s Eye View)
- One of the initiatives we feel strongly about at CFA Institute is what we call “putting investors first” — the fiduciary duty to protect investor interests. Looked at nother way, if you’re in the advisory business, putting clients first. In this folksy short video, restaurateur Bob Farrell explains customer service and says it comes down to this question: What’s the extra thing you do to make the customer (in your case, the client) happy? (YouTube)
And Now For Something Completely Different
- “Sony World Photography Award 2014 Finalists” (The Telegraph)
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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