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Welcome to Retired Investor

Welcome to Retired Investor

"Will we outlive our savings?" "Will we have enough money to cover long term care or other unexpected expenses?" "Will we be able to leave something to others?"

These days, many people spend a lot of time worrying about these critical questions, but perhaps not enough time about this one: What steps should you take to ensure you are making good asset allocation and risk management decisions?

We started Retired Investor to help you answer the critical financial questions you face on the basis of evidence, logic and good analysis. Our goal is to help you become smarter about investing, so you can make better decisions. While other sites give you data and news, we help you to understand what they mean. We give you the analysis and knowledge you need to avoid common mistakes, and achieve your post-retirement investing goals.

On our site and in our journals, we start with a clear explanation of our asset allocation methodologies (including their strengths and weaknesses) and use them to generate model long-term policy portfolios and rebalancing strategies. In addition, because your chances of achieving your long-term goals can be seriously hurt by dangerous asset class overvaluations and large downside losses, in each issue of Retired Investor we provide you with our assessment of the economic outlook, current asset class valuations, and the implications of this information for asset allocation. For a good example of the analysis we provide, download our May 2007 article on "Why We Dont Sleep Well at Night".

We publish Retired Investor 10 tens per year. You can either read it on your computer screen or download it as a pdf file to print. We alert you by email when a new issue is up on the site. Each monthly issue contains the following:

1. A summary of year to date returns on different asset classes (bonds, equities, commercial property, commodities, and timber) as well as a range of uncorrelated alpha stratedgies from the perspective of eight different currencies (including Australian, Canadian, and U.S. Dollars, Euro, Yen, Pounds Sterling, Swiss Francs and Indian Rupees);
2. Asset class valuation updates for each of these eight regions;
3. Letters to the editor;
4. A feature article, on an important investing issue, and a collection of shorter product and strategy notes;
5. Year-to-date performance for our model portfolios; and
6. Lists of index funds, ETFs, and other investments that can be used to implement our model portfolios' asset allocations.

We have also collected our past articles on different subjects on our website, to facilitate self-study by our subscribers.

Over 5,000 model portfolios solutions are available to subscribers whose functional currencies include Australian, Canadian, and U.S. Dollars, Euro, Yen Pounds Sterling, Swiss Francs and Indian Rupees. These are intended to maximize the probability of achieving different target income (withdrawal) and savings/bequest goals, over different expected lifetimes. Our model portfolios solutions include different combinations of up to eleven asset classes: real return bonds, domestic bonds, foreign currency bonds, domestic commercial property, foreign commercial property, commodities, timber, domestic equity, foreign developed market equity, emerging markets equity, and uncorrelated alpha strategies. Here is a Sample Portfolio Solution.

Also,please see the green buttons on the left side of this page for a more complete description of our model portfolios and methodology, as well as the overall post-retirement investment process, and how Retired Investor can help you think it through logically and manage it wisely.

Subscribe today, and start getting the knowledge and insights you need to make better asset allocation decisions and avoid painful losses.

Speaking Engagements:

For a small fee, we can provide an entertaining and informative speaker for your conference, meeting or webinar. Please contact us for more details.

Redistributing our Content:

If you are interested in redistributing our content for your site or publication, please contact us and we will be happy to discuss further.

Updates to Retired Investor

05.09 May 2009 Depth of Articles, CUT/WOOD ETF vs Other Timber Options, Economic Methodology - Analysis of Competing Hypotheses; Grounding Risk in Neuroscience; May 2009 Economic Update; Which Asset Classes are the Best Inflation Hedges, Gold in Canada, IndexIQ Products and Pademic Briefing

04.09 April 2009 Further Discussion of Carbon Credits as an Asset Class and Model Portfolio Performance from 2004 - 2008; Economic Update: Situation, Scenarios, and Asset Allocation Implications; Product and Strategy Notes: Closer Look at Asset Class Returns (2006 - 2008); Bank Stress Tests; More Bad News for Active Funds; and New Products and Interesting Research Papers

03.09 March 2009 Economic Update: Situation, Scenarios, and Asset Allocation Implications; Product and Strategy Notes: Two Interesting Papers on Commodities; News of Note for Advisors; Two Interesting Hedge Fund Papers; On the Product Front and Foreign Currency Bonds....Again

02.09 February 2009 Uncorrelated Alpha Strategies Detail; Keeping an Eye on Long Term Trends; Economic Situation Update; Product and Strategy Notes: Carbon Update; Will This Crisis Finally Change Investor Behavior?; Private Equity Update; Interesting Research; Product Reviews: JBGOUA.SW, ZGLD.SW, USO, USL, ADANX, BWZ, ISHG, IGov, PSAIX; Changes to Index Investor's Uncorrelated Alpha Allocation

12.08/01.09 December2008/January 2009. Double Issue. What Will We Tell The Clients?; 2008 Year End Situation and Methodology Update and Product and Strategy Notes: How to Deal with Real Debt Burden; Why He Madoff with Their Money; Great Writing Not to be Missed; Interesting Data Returns; Thought Provoking Research; and New Products

11.08 November 2008. Where Do We as Investors Go Now?; Are Emerging Market Equities Undervalued? and Product and Strategy Notes: Interesting New Papers and Products; Debt, Deflation - and Depression?

10.08 October 2008. Asset Class Valuation Update; Economic and Asset Allocation Update and Product and Strategy Notes: Is a Financial Crisis a Normal Accident?; New Products and Studies; and The Supply of and Demand for Commodity Index Returns

8.08/9.08 August/September 2008. Double Issue. Looking Back on the 2007 Credit Crisis; Possible Implications of Some Trends that Cannot Continue and Product and Strategy Notes: Profitability of Active Managers and Other News from the Private Equity Front


Thoughtful Quotes

"My great regret is that I and so many of us who have been involved in this industry for so long did not recognize the serious possibility of the extreme circumstances that the financial system faces," [Robert] Rubin wrote in a letter to Vikram Pandit. - Reuters, Jan 10, 2009

"In 2007, the people who ran Wall Street, and the ones who regulated it, did not understand how serious the financial crisis was becoming." - Floyd Norris, The New York Times, Dec. 19, 2008

"Big (and negative) changes are not too far away in the world economy, even as global growth continues to be strong, equity indexes around the world hit new highs, and credit risk margins are at near record lows...There is still an element of chance as to what will be the event or events that reverses the herd and sets the crash in motion. That these events frequently aren't clear, even in retrospect - just read the studies about the events of 1929, 1987 or 2001 -- means that forecasting them is basically impossible. However, we are not without indicators that something dangerous is building up in the system....For example, earlier this year we had a sudden burst of volatility that disappeared almost as quickly as it arrived...Foreign central banks - not private investors - are today funding most of the U.S. current account deficit...Most recently, we have seen many U.S. housing indicators plunge, without apparent impact on consumer spending or financial market risk premiums and returns...Liquidity is at record levels, and this is typically associated with the quickening development and subsequent rapid deflation of financial market bubbles...There is also considerable evidence that many asset classes have simultaneously become overvalued, which is a rare event in historical terms. Moreover...the collapse of housing bubbles is likely to have a far more severe impact than the collapse of an equity bubble...Analysts tend to underestimate the risk they face, and financial models - including the Value At Risk Models that underpin many institutional investors' risk management plans - inadequately capture it...Greed and fear are finely balanced today, and it won't take much to tip the balance in the latter direction...Given the strong linkages between asset classes created by developments in the derivatives markets, we think any downturn could quickly accelerate and spread across many asset classes...In the ten years our publications have been in existence, we have never suggested taking what for us is a radical step: reducing one's exposure to different asset classes, and raising holdings of cash...Yet in spite of the possibly unpleasant tax consequences, we think that reducing exposure to the most overvalued asset classes and either raising allocations to undervalued asset classes or moving into cash (or short term government bonds) looks more and more like the most prudent course of action. We wish that wasn't so. But we can't ignore the increasingly insistent warning voice that keeps us awake at night." - The Index Investor, May, 2007 - "Why We Don't Sleep Well at Night" (Complete Article is available.)

"We are often asked whether or not we believe the U.S. equity market is overvalued. Our answer is a resounding "yes!" .... It is certainly possible that from time to time relative valuations (e.g., of bonds versus equities) will get so glaringly out of line that it makes sense to temporarily move beyond your target portfolio weights for each asset class. If you believe (as we do) that this is the case today in the United States, then your next question is "what can I do about it?"...The first option is to simply sell your S&P 500 index, and reinvest the proceeds in a bond market index fund...The second option is to purchase a put option on the S&P 500 Index..." - The Index Investor, March 2000

You can always reach us at questions@retiredinvestor.com

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"June 2009 RI Journal"
Publication Date: June 6, 2009