Increase Risk as You Age?

I think that should be 7.5-8% for new retirees.

Of course, each individual has different needs. The COLA shouldn't be a factor since that should go up independently of when one starts taking SS payments. Delaying SS is the equivalent of taking SS and buying a lifetime annuity, but the benefit of delaying SS is better because of the COLA. If one is married, the benefit of delaying can be higher.

-- Ron

The price of gold is only slightly higher than recent lows. Gold has been more stable in value than paper currency.

The implied volatility is high.

GLD is currently trading at $82.71 and the Feb 87 options have a 1.80 bid which would give an annualized return of 22% if GLD doesn't drop in value.

If an investor thinks that gold is way over priced, then the investor shouldn't buy gold.

And, if an investor thinks that gold is going to sky rocket to $950/oz in the next month don't sell options.

-- Ron

My figures are closer to 15 years. Thumper

The cost of insulation does not increase the value of your home. Having no insulation may lower the price of you home insulation but just increasing insulation has no effect. Thumper

that insulation adds to the market value of a home.

-- Ron

The best gov bonds recently would have only paid $100 a week (30 year

2.5%). Its not clear whether this is abnormally low or will be a trend.

3.5-4.5% or so /nominal/ (if you go out past 10yr maturity). After accounting for high tax brackets, that may be more like a taxable equivalent of 6-8% (which, compared to treasuries, is astounding). But that's still nominal, not real (inflation-adjusted). And out past 10yrs, you are still taking huge interest rate risk.

One of the biggest bangs for the buck I know of.

I thought the rates were higher recently, but I should have checked current rates.

I have to agree that it's difficult to get a reasonable return on low risk investments.

-- Ron

In this vein - one thing more "active" MIFPers might keep an eye on is closed-end muni funds. They take homework and you have to understand how the specific fund works, in particular any leverage it uses via a preferred and the risks that introduces. But every now and then the discounts to NAV get very wide because of "too many sellers" at a given moment. This lack of liquidity also means you can't count on selling them at a fair price - "patient buying, patient selling".

Of course this isn't getting a reasonable return on a lower-risk investment, it's _adding risk_ to a lower-risk investment. Some people are willing to do that though. Because of that discount/premium "issue" with closed-end funds, and the fact that pricing is driven in part by who happens to be selling on a given day, it's an area where a small investor who does the work might have an edge over larger investors.

-Tad

$300 * 52 = $15600.

In a former post, I received a stern rebuke for such a number. In the US this is below poverty. Please use $50k/yr as an realistic number.

dapperdobbs on Jan 6 2008, 11:14 pm: