Gallup recently released data from a survey of over 1,000 U.S. investors where findings reported more than half of polled investors have not ruled out the possibility of moving out of stocks if interest rates rise.
Survey respondents also largely believe the U.S. economy will see rising interest rates in the near future, and the vast majority believes this increase in rates will be modest.
We are exhuming the body of the Retirement Income horse. Yeah, we figured we haven't quite beaten this horse enough, so we're gonna dig him up and beat on him some more. This is all metaphor of course, we don't have any real hatred of horses or any other animals for that matter.
Recently, in my quest to bring our audience ever relevant information in our weekly podcast, I stumbled upon a Forbes article written by Rob Russell that cites a Morningstar report from earlier in 2013 that caught my eye.
The data from Morningstar suggests that the proverbial 4% withdrawal rate of your retirement portfolio, may not work so well after all.
Earlier this month, Gallup released data it collects concerning stock ownership in the United States. The data show that stock ownership among Americans is at its lowest point since Gallup began tracking the data in 1998 with just 52% of American’s surveyed claiming to either directly or indirectly own stock in a public company.
Historical data from Gallup shows us that American stock ownership peaked around 2007 at 65% reporting direct or indirect ownership in stocks, and this percentage has been on a consistent decline since. Not surprisingly the sharpest declines in ownership took place during throughout 2008, but somewhat counter-intuitively—or at least that’s what some experts would have you believe, the trend continued in the same direction despite what has become a pretty good market rally since the 2008 fallout.
As of late, it would seem that a great many people are engaged in a bit of retirement savings roulette and I’m afraid it’s not going to end well for them.
Just in case you’ve been living under a rock for the past four years or so, interest rates paid on traditional income generating retirement vehicles—i.e. CD’s, Bonds, Fixed Annuities, and Money Market Accounts is abysmal.
For a while, Brandon and I have been discussing the coming 401k bond blood bath for people who are retiring and have been planning for years to shift their asset allocation to a much more conservative posture. Remember when the conventional wisdom was that during your retirement years you would shift the weighting of your investment portfolio to income producing assets…think bonds.