When complacency met fear: $18 billion monthly outflow of SPY.
Volatility came roaring back in February as the S&P 500 notched its first negative monthly return in more than a year. The S&P 500 Managed Risk Index reduced its equity allocation for the first time in 18 months. The U.S. bond market notched its second consecutive negative monthly return as the yield curve tilted higher and credit spreads widened, diminishing its diversification benefit.
What does the velocity of money have to do with inflation?
February 2018: A case study in VIX exposure
Americans have under-saved and will need more than withdrawals from savings to survive retirement. An optimal withdrawal strategy and asset allocation, delaying Social Security, annuitizing, tapping home equity and possibly working longer need to be evaluated. Let’s take a typical American couple and evaluate which options improve retirement consumption.
VIX is back, be aware of the normalcy bias in 2017 .
Global equities roared out of the gate in January, notching their best start to a new year since 1994. The price of oil made an even larger jump than equities, reaching its highest price since 2014, while the U.S. dollar endured its largest monthly decline in nearly two years. Even though bond-market inflation expectations have risen to a three-year high, the Fed kept its overnight interest rate unchanged at its January meeting.
Most research on retirement strategies assumes that people have saved adequately. But data on household savings shows that many households fall short, and will need to call on relatives or other sources for support. This raises questions about the best withdrawal or annuity strategies when savings are insufficient. It turns out that which strategy works best is different than for adequately funded retirements.
How technology slows inflation across the economy.
A strategy that combines variable withdrawals with partial annuitization using a single-premium immediate annuity maximizes the cash available for consumption.