FYI:
Regards,
Ted
March 10, 2016
Dear WEALTHTRACK Subscriber,
Bernie Sanders wins the Michigan Democratic Primary. Donald Trump has a big lead in the Republican primary race. What difference would a presidential win by either candidate make? New online this week, we are sharing an analysis from Cornerstone Macro’s top rated Washington analyst, Andy Laperriere, which is an eye opener!
Because it is public television’s spring fund raising season, WEALTHTRACK may not be airing on your local station this weekend. As a result, we are revisiting some programs on popular topics. One of those issues is retirement.
The investment handwriting has been on the wall for a long time. The long-standing assumption that portfolios of stocks, bonds and some other holdings would generate 8% annual returns is no longer a given. As The Wall Street Journal reported recently “Public pension funds from California to New York are cutting investment-return predictions to their lowest levels since the 1980’s…”
According to the Journal more than two-thirds of state retirement systems have trimmed assumptions since 2008. Among 126 plans the average target is 7.68%,
the lowest annual return expectation since at least 1989. Overtime these lower assumptions are going to mean lower benefits for retirees and bigger pension liabilities for governments.
Meanwhile, according to another Journal article, the California State Teachers’ Retirement System, known as CalSTRS, the nation’s second-largest pension fund is “considering a significant shift away from some stocks and bonds, one of the most aggressive moves yet by a major retirement system to protect itself against another downturn.”
According to the Journal about 55% of CalSTRS’ $191 billion dollar portfolio is in stocks. As part of what it refers to as these “risk-mitigating strategies”, it’s considering
“… moving as much as 12% of the fund’s portfolio… into U.S. Treasurys, hedge funds and other complex investments that they hope will perform well if markets tumble.”
This week on WEALTHTRACK we will revisit our conversation with Erin Botsford, who is actively implementing risk mitigating strategies of her own for clients. Botsford is a Certified Financial Planner and Founder and CEO of The Botsford Group, a boutique financial planning firm that specializes in retirement and asset protection strategies for business owners and executives.
She has been named one of Barron’s Top 100 Independent Financial Advisors and numerous times one of its Top 100 Women Financial Advisors. She has trademarked her “lifestyle-driven investing” philosophy, which she explains in her book, “The Big Retirement Risk: Running Out of Money Before You Run Out of Time”.
An independent thinker, Botsford is critical of traditional financial planning approaches such as asset allocation strategies, set systematic withdrawals and what she calls the “myth of the magic retirement number”. She will explain why stocks and bonds are not the core of her clients’ retirement portfolios and why insurance products are.
If WEALTHTRACK isn’t showing on your local station this week due to the pledge campaign, you can always watch it on our website. You’ll also find our exclusive online EXTRA interview with Botsford about the charitable organizations she and her husband are supporting in Africa.
Thank you for watching. Have a great weekend and make the week ahead a profitable and productive one.
Best Regards,
Consuelo
