July 06, 2009

Post #98 - Look at the Recent Numbers! (Bad Advice)

Post #98

Part 4:  Good Advice, Bad Advice, and News About Investment People (continued)

Here is a good article that offers statistical proof that managed funds have not been doing well in the bear market:

Active Managers and Bear Markets: Don’t Believe the Hype

Thank you Mr. McDevitt for putting some hard facts out on the table to help prove the things I said in Post 84.

Mr. McDevitt also credits the following Vanguard study in his article.  Pages 9 through 13 are the important ones to read.

Download VIPSS09 (pdf)

This study carries much more weight because it looks at a much longer period of time. That’s the key.  A long period of time.  Always look at performance over a five or ten year period.  Preferably ten.  Never less than five.

Here’s an article that drives home my point:

Short-Term Performance Is for Losers - Kiplinger.com

I’m not belittling Mr. McDevitt’s effort.  I’m just reminding you that when it comes to the stock market, short term numbers can be very misleading.

June 29, 2009

Q&A #22 - Get multiple credit cards to improve your credit score?

Q: Should you get multiple credit cards to improve your credit score?

A: Post 33 talks about credit cards in detail.  I hope I did a good job scaring you.  Recently, I was discussing credit cards with a bunch of people.  They told me that they use a few credit cards to make sure they have a higher credit score.  Having a good credit score is important.  It could affect whether or not you qualify for a mortgage loan.  One landlord that I know even said that he won’t rent an apartment to anybody with a low credit score. 

Here’s a good article that explains credit scores.

Credit Scores - What You Need to Know

And another article that gives six reasons for owning multiple credit cards.

6 good reasons for multiple credit cards

One of the six reasons listed is that multiple cards will improve your credit score (provided you use them responsibly).

So if you only have one credit card, and you are paying the balances every month, go ahead and open up another credit line or two.  Make sure you do it well in advance of applying for a mortgage.  Apparently, it hurts your score to have newer credit lines.  As the credit lines age, it helps your score.

But don’t start spending more money just because you have more credit.  Keep saving and investing.  If your average credit card bill is $1,200 a month with one card, make sure that when you get three cards, your average balance combined is still $1,200 per month.  And keep paying the outstanding balances completely.  It won’t hurt the credit score, and you will avoid those nasty fees and finance charges.

If you have a bad credit score, here’s another article to read:

How to Improve Your Credit Score

I’m in a different position from you guys.  I don’t need any more credit, so I froze mine.  This prevents anyone from taking out a loan or credit card in my name, including me.  It’s the best way to prevent identity theft.  If I need more credit down the road, I can lift the freeze temporarily.  But it’s a hassle to do so.

The rest of you better review your credit reports to make sure nobody’s playing games with your credit history.  Since there are three credit agencies, you can work it so you get a free one from each of them once a year.  Stagger it so that each free report you get is four months from the last report.  That way, every four months, you have free access to your credit report.

June 22, 2009

Post #97 - Sector Fund Investing (Bad Advice)

Post #97

Part 4:  Good Advice, Bad Advice, and News About Investment People (continued)

Sector Fund Investing – Bad Advice
Sector funds (and ETFs) own stocks in one specific industry, or sector.  Buying a sector fund means you are betting that this specific industry will do better than the market as a whole.

I recommend that you own the Vanguard REIT fund, which invests in the commercial real estate sector.  Not because I think real estate will outperform the rest of the market.  Own it because commercial real estate does not move up or down in lock step with other equity asset classes.  Modern Portfolio Theory tells us that this will decrease the overall volatility of your portfolio, which means it reduces risk.  That’s why I want you to own the Vanguard REIT Index Fund.  REITs should be 10% of your portfolio.

Admittedly, owning real estate during the last year and a half has been a very painful experience.  What can you do?  Take your lumps and keep your positions.

You must own the REIT fund for as long as you own your other funds.  You are not speculating in commercial real estate.  You are long term investing in commercial real estate.  There’s a big difference.

Do You Need a Sector Fund?

Are there any sectors besides real estate that you might want to own for the next forty years?  I don’t think so.  But who says I’m the smartest guy in the world?  Some experts will tell you that commodities are an important sector to own.  “Commodities” is a general term that includes gold, silver, wheat, rice, crude oil, things like that.  I have no problem if you commit 5% of your portfolio to commodities.  It will be difficult to find one fund that invests in both agricultural and non-agricultural commodities.  You may need to own two funds. 

I don’t think you need to own commodities, but if you do your own research and decide you want them, go ahead.  As I said, I’m not the smartest guy in the world.  And I don’t think that it will hurt you a lot to own them.

Most people screw up when they invest in sector funds.  They decide that energy will be hot for the next year or two.  They buy the energy sector fund.  Then they decide that health care will be hot.  So they switch from energy into health care.  Then they decide real estate is the next big thing, and they make another switch.  This is absolutely the worst thing to do, unless you can predict the future.

So, buy commodities if you are convinced that the sector will give your portfolio diversity without increasing the risk.  Hold the commodities as long as you hold your other Vanguard funds. 

You are a long term investor.  Not someone who guesses which sector will be hot next year.

June 15, 2009

Q&A #21 - Will the world go down in flames?

Q: Will the world go down in flames?  Will the market ever recover to where we were a few years ago?
A: I’ve had some email discussions with a few readers and they have asked me these questions in various ways.  

Remember that the one big assumption we made at the beginning of this blog is that the world is getting better, and will continue to get better.  That is an assumption, not a guarantee.  If you do not think the world will continue to be a better place to live, then you should not invest in equities.

Can I prove that the world will continue to get better?  No.

There are big problems in the world.  Will one of these problems get so big that it makes the world regress?  I don’t think so, but I can’t prove it.  You need to make your own evaluations.

Sorry I can’t offer you any comfort in this area.

Let’s go forward under the premise that our one big assumption is correct.  So, when will the market recover?

Here’s a good read: Download JGLetter_1Q09

Try to read the whole newsletter.  I found it a little difficult to understand some of the things he was saying.  But the last page gives a good summary of Grantham’s views.  He gives us an 85% chance to get to a new high in 20 years and a 15% chance to do it sooner.  In other words, he is 100% certain that in 20 years or sooner, the market will be at an all time high.

Here’s another good read: Stocks still face deflationary collapse

This article paints a bleak picture for the short term, but makes no predictions beyond 2016.  I believe that his advice is meant for people who may be retiring in the next seven years.  They probably shouldn’t invest any more money in the stock market, if they believe his predictions.  And maybe they should cut their losses now and cash out now! 

If you are a long term investor, which I hope you are, then this second article really doesn’t help you.  You shouldn’t care what happens in the next seven years.  You should be saying to him, “What about in 40 years?  Read your technical analysis tea leaves and charts and astrology signs and tell us what will happen then, Obi-wan”.

Here’s the bottom line.  Both of theses guys could be wrong.  There is no way of knowing what’s really going to happen.

But, if the second guy is right, you shouldn’t stop investing for the next seven years because things will be choppy.  The best time to be saving and investing is when the market is hurting, not when its at an all time high.

So keep saving and investing, provided you believe our assumption that the world will continue to be a better place.  You see how we’re back to our one, big, unprovable assumption? 

In the end, everything hinges on your belief in the world!  Which is a big reason why so many people to not invest their money in equities.  It takes a leap of faith!   

June 08, 2009

Q&A #20 - Does the Sierra Club offer mutual funds?

Q: Does the Sierra Club offer mutual funds?
A: OK, I submitted this question myself.  I hate those little Sierra Club whiners who come around asking for money and trying to make me feel guilty about the world.  Did I ever knock on their parents’ doors and try to guilt them into buying whole life insurance so their kids wouldn’t have to pay taxes on their inheritance?  No I didn’t.

Sure, they’re against nuclear power now.  Wait until their lights go out or their monthly electric bill consumes 40% of their gross income.  They’ll change their tune.

It’s even better when the holy rollers come around asking if I’ve found Jesus.  First, I explain that I was an altar boy in grade school and am still in therapy from the trauma that the priests and nuns put us through in the name of Jesus.  And I’m not even talking about anything sexual.  Then I point to the mezuzah on the doorjamb and explain that my wife is a radical Zionist who helped settle Palestine (which would make her like 100 years old, but they can’t count).  I tell them they’ve got ten seconds to scoot before I sic my crazed blind and half deaf pointer on them.  Then I laugh insanely as they run across my lawn, tripping over the various rakes and other gardening implements I never seem to put back into the garage.  

The Sierra Club???  You would think that they are investing “responsibly”.  Go ahead, type in www.sierraclubfunds.com on the old homepage.  You will be directed to a website for Forward Funds.  The large cap fund they offer was started in October 2006, so we really can’t measure past performance against any benchmarks.  The fund is too young.  But when you buy the fund, you pay a commission of 5.75% (outrageous).  And the ongoing annual fee the fund charges you is 1.49% (as opposed to 0.18% for the Vanguard Total Stock Market fund).   

OK, maybe these extra costs are the price you pay for a fund that is associated with the Sierra Club.  This fund should be more environmentally friendly, no?  Here are the top ten holdings of the fund as of March 31, 2009:

  • Johnson and Johnson
  • IBM
  • Coca Cola
  • Nvidia Corp
  • Bristol Myers Squibb
  • Oracle
  • Exxon
  • Walmart
  • McDonald’s
  • First Energy

What about the Forward Small Cap Fund?  Maybe their top ten holdings have some crunchy sounding names.

  • Aecom Tech
  • Corrections Corp of America
  • URS
  • Neutral Tandem
  • Chipotle Mexican Grill
  • Family Dollar Stores
  • Factset Research Systems
  • Salesforce.com
  • Amedisys, Inc.
  • Investment Technology Group

I’ve heard of a few of these but not the others.  However, they don’t smell crunchy to me.  And you have to pay a 5.57% commission, as well as a 1.77% annual expense ratio, for the privilege of investing in this Sierra Club Recommended fund.  

In fairness, as I mentioned in the last post, no mutual fund will last long if it doesn’t deliver decent returns compared to its peers.  So the fund managers really have no choice.  They have to buy companies that make money, not companies that do nice things.  I’m sure they have some sort of filter to make sure they don’t own any sweatshops or napalm producing companies.  But my point with Socially Responsible Investing is that the fund managers will continually be compromising the fund’s investment goals in order to make sure the fund generates good enough returns to stay in business.

And as you can see from the costs of owning these funds, the fund managers need to pay for their three houses and Mercedes Benz sportscars too.

June 01, 2009

Q&A #19 - Profit from environmental companies?

Question & Answer #19

Q: I think that climate change is the big problem for our generation, and under those circumstances, the companies with an environmental mission should be able to profit from the problem.  Is this logic flawed?

A: It’s not flawed.  But not every company that gets involved in climate change will be a winner.  Some will profit.  Many others will not.  So don’t buy individual stocks.  Find a mutual fund that specializes in this area, to spread your risk and reduce your expenses.  And use your mad money (5% of your portfolio) for this investment.  Because over time, most of your equity money should be invested in the other funds I recommend, which are designed to give you market average returns at minimum risk. 

There are a couple of web sites related to social investing.  They claim that there are more than 260 funds specializing in this field.  You will need to focus on the funds that specifically invest in climate related companies.  There are probably a handful.  When you research these funds, you will probably notice that the annual expense ratio is much higher than the Vanguard Index Funds I have recommended.  That’s a price you pay for taking a chance on environmental companies.  Also, before you invest, take a look at the fund’s holdings.  You might be surprised to find out that the holdings don’t exactly meet your own standards.  This is another problem with Socially Responsible Investing.  The fund managers need to show a reasonable return, and are forced to compromise their standards.  Wait until you see the next post about Sierra Club Funds!

President Obama’s main fund holding is Vanguard FTSE Social Index Fund.  It has a low expense ratio of 0.24% and $254 million in assets.  But it does not invest a lot of money in climate change.  The top three industry holdings are financials, tech, and consumer goods.  If you are tempted to buy this fund, to salve your conscience, I advise against it.  Put your money into the Total Stock Market Index Fund and the Total International Fund instead.  You owe it to yourself to make sure you have a comfortable retirement.

I talked about socially responsible investing in Q&A #5.  Please re-read that post for the details.

May 25, 2009

Post #96 - Scott Burns

Post #96

Part 4:  Good Advice, Bad Advice, and News About Investment People (continued)

Scott Burns
Scott made a living writing about investment topics for many years.  He developed a huge following because he knows his stuff and can explain things easily and well.  He developed the couch potato portfolios that Paul Farrell included in his book “The Lazy Person’s Guide to Investing”.

Scott now has a website called Asset Builder.  He’s joined the ranks of those who get paid for managing other people’s money.  However, he’s still true to his roots.

Here’s a good article for you to read:   It’s Time for Plan B 

The article offers more proof that unmanaged funds and index funds will perform better over the long haul than managed funds.  In both equities and bonds.  Up to now, I’ve just been talking about the advantages of equity index funds, but it turns out that bond index funds also outperform.

He also brings up the topic of “survivorship bias” and how it skews fund comparisons.

Let’s say you decide to compare the performance of an index fund that’s been around for 10 years against all other funds that invest in the same asset class.  You look around and find that there are only ten funds you can compare against.  That is, there are ten funds that have been in business for the last ten years and invest in the same asset class as the index.  You do the comparison and come up with a conclusion, based on the numbers.

You have not accounted for the fact that there may have been twenty other funds that invested in this asset class ten years ago, and all of them have gone out of business since then because they did so poorly.  To get a true comparison, you would have to include these funds in your analysis.  If you did, it would make the index fund look much better.

The mutual fund industry, Morningstar included, usually overlooks the funds that have failed.  This is called survivorship bias.  This presents an incorrect result when you are comparing relative performance of an index fund to its peers in the managed fund group.

Guess what?  Most of the time whoever is doing the comparing leaves out the failed funds on purpose, because they don’t want the index funds to look as good.

How many funds fail?  Mr. Burns indicates that 1 out of 4 funds will disappear in a five year period.  That’s a lot of funds.

Anyway, the more you know about the shenanigans these guys play, the better prepared you are to invest wisely.  So read this article and rest soundly knowing that index funds are the best bet for you over the long haul.

I copied this from the asset builder website:

Our investing approach is an evolution of the “Couch Potato Portfolio” developed by personal finance writer Scott Burns. It combines the use of low-cost index funds with research-based diversification strategies.


I don’t know if this is a better approach than strictly using index funds because I don’t know what kind of diversification strategies they suggest.  And I haven’t asked them to manage my money, so I’ll never know if their way is better. 

A year ago I would have told you that whatever Scott Burns says you can take as gospel.  Now that he’s making money from providing investment advice, I have those little doubts in the back of my head.  Is he completely impartial still?  I don’t know.

May 18, 2009

Post #95 - Self roof repair doesn’t save money

Post #95

Part 4:  Good Advice, Bad Advice, and News About Investment People (continued)

Don’t do repairs on the roof to try to save money
Anything that requires going up on a roof or a tall ladder.  If you are like me, your medical bills will be higher than your savings.  Just pay someone who knows their stuff to walk around on your roof.  This summer I was fixing some holes in the wood trim at the top of my house.  (Damn those carpenter bees and woodpeckers.)  I had to sit on a very slanty portion of the roof to fill the holes with putty.  So when I went back up to paint, I decided to tie myself to a tree at the back of the house, in case I slipped and started rolling off the front side of the roof.  My big mistake was putting a dropcloth down under the area I was going to paint.  I forgot that by reducing friction between my sneakers and the roofing tiles, I was almost guaranteeing that I would get airborne. 

Sure enough, as soon as I stepped on the dropcloth I went completely horizontal, just like you see on the cartoons.  Paint wound up in my hair, in my mouth, and on the roof.  Luckily, the rope prevented me from rolling off the roof and dropping 15 feet into the arms of a few very small azalea bushes.  I had tied myself with just enough rope to get to the area I needed to paint, and no extra. 

I was able to paint the darn trim board, but now I have white paint on the black roof shingles.  I have been trying unsuccessfully for the last month to get my wife to go up there and paint over the white blobs with some black spray paint.  She’s much more sure footed than I am when we hike in the mountains, so I figure a slanty roof should be a piece of cake for her.  So far, I can’t convince her to do it.

May 11, 2009

Post #94 - Gardening doesn’t save money

Post #94

Part 4:  Good Advice, Bad Advice, and News About Investment People (continued)

Gardening doesn’t save money
Having a back yard garden is not a good way to save money.  You think that all the produce will lower your grocery costs.   But you forget about the cost of actually growing the garden!  So you should raise vegetables only for the psychological benefits.

I can’t believe how much my wife loves her garden.  She gets an incredible sense of satisfaction seeing the vegetables grow.  

I get a different sense.  It’s called pain!

Putting a fence around the garden is not fun.  It costs about $250 in materials for an eight foot fence to surround a 15 by 20 foot garden.  It’s got to be eight feet high to discourage the deer from turning the garden into a salad bar.  Even then, they can get in via other methods.  Sometimes they hang around near the gate, hiding behind the shrubs.  They slip in unnoticed when you go to weed.  One deer tried to parachute in last summer.  Luckily the wind shifted and he wound up putting a hoof through my neighbor’s roof.

Rototilling hurts.  First you have to go to the local rental place and find a tiller that fits in your car.  Unless you drive a four by four truck, you wind up with a little one.  The little ones weigh about two pounds and just skip along the top of the soil.  This means you have to push the blades of the tiller into the hard, semi-frozen, unyielding ground as they are spinning.  Try doing that for two hours when your usual exercise is hoisting a wine glass and a remote control.

Then you have to help the wife dig holes for the seedlings.  OK, they are small holes.  But digging is not fun unless you find buried treasure.

After a few weeks, if it doesn’t rain too much, but it rains enough, and the rabbits don’t sneak through the fence you then get to weed and do a little harvesting.

  • I try to be in another location (like Montana) when the weeds come up, but sometimes I forget to book a flight and get roped into the weeding.  Then I get to spend four sessions at the chiropractor’s office while he makes a few adjustments so I can stand normally again.
  • Harvesting also requires a lot of stooped labor.  Just pick one bag of bush beans and it’s back to the chiropractor, who just bought a small yacht from the fees I’ve paid him during the gardening season.

When the kids were younger we had a much bigger garden and always planted too much.   

We used to grow four zucchini plants each year.  What normal family can possible eat the fruits of four zucchini plants?  We got so much zucchini that we had to give it away.  We loaded the kids into a little red wagon, covered them with zucchini, gave them breathing straws so they wouldn’t smother, and marched down the street.  All of our neighbors got vegetables.  After a week or two, the neighbors heard the squeak of the wagon wheels as we made our rounds.  They drew their curtains and locked their doors.  Nobody was home in our entire neighborhood. 

What to do with the extra zucchini?  We set up a zucchini stand in our driveway.  Our daughter, who could sell sand to Arabs and ice to Eskimos, was not able to give away our produce.  So the wife uncovered recipes for zucchini soup, zucchini fritters, zucchini cookies, zucchini popcorn, zucchini a la mode, and zucchini under glass.  At night, I would sneak out to our garden and secretly feed birth control pills to the zucchini plants, anything to stop them from producing.

My wife also grew lots of eggplant.  I had never heard of eggplant until I moved from Queens, New York to the wilds of New Jersey.  Of course, most people in New Jersey didn’t know what a vanilla egg cream was, so that evened things out a bit.  Since my wife is from Yonkers, I can’t even imagine where she ever got the idea that eggplants were something that normal people ate.  Nobody in Yonkers ate eggplant.  Egg Foo Young maybe, but not eggplant. 

Anyway, I didn’t like the idea of growing eggplant or eating anything that contained eggplant.  It had a funny color.  Who ever heard of purple vegetables?  It was too mushy when it was cooked.  It gave me cholera, or warts or something like that.  No matter, we grew plenty of eggplant.  Every night we played hide and seek.  The wife would hide eggplant somewhere in the dinner, and the kids and I would try to identify it and drop it on the floor. 

We complained so much that the wife went on a cooking strike.  That was bad.  We survived for three days eating my dining concoctions.  Then the kids threw in the towel.  I held out for another twenty minutes, to show them that I was made of sterner stuff.  Then I also surrendered.  After that, it was eggplants R Us.

Tomatoes were the coup de grace in the garden.  Each year we planted twelve, yes I said twelve, tomato plants.  I tried to cage them.  I thought it would limit the output.  But the suckers grew right through the bars of the cages.  Every year, all the tomatoes ripened within eight minutes of each other, on the third Thursday in August.  This has always meant one thing, tomato sauce. 

I hate making tomato sauce.  It takes about three days.  First you have to pick about three thousand tomatoes.  Then you have to throw them in a pot of boiling water.  We usually build a fire under the upstairs Jacuzzi and use that as our pot.  The tomatoes scream when you throw them in.  It’s a terrible thing to hear.  Come to think of it, the noise actually comes from me.  I always throw the tomatoes into the Jacuzzi a little too hard and splatter myself with scalding spray.  That hurts!

After a few minutes, you have to take the tomatoes out of the hot water and peel them.  They don’t like being peeled.  They squirm and slide and try to get away. You can’t let them slide through your grasp or you get The Glare!  The Glare is a look that my father experimented with, which my wife has perfected.  I can feel The Glare burn through me as I chase an escaping, half naked tomato into the dining room. 

When the tomatoes are all peeled, and lie shivering on the sideboard, you have to take out the seeds.  I can’t tell you the anguish I feel as I take one after another of the poor little things and squeeze them until their many little seedies pop out.  How many future generations of these tomatoes have been squashed by my calloused fingers, I can’t tell you.

Finally, you chuck the tomatoes in a blender, turn them into puree, and hand them to your wife, the master sauce maker.  What unspeakable acts she commits from that point on, I do not know.  I usually run from the kitchen after the puree part.  But I do know that the result tastes great, so I don’t lose too much sleep.  Unfortunately, three days work with three thousand tomatoes results in about a half a cup of sauce, so the rewards are fleeting.

As I write this, I am remembering the smell of tomato sauce coming from the kitchen.  It was a wonderful smell.

These days, our garden is a lot smaller.  Thank God for little favors.  The wagon is rusting in the basement, the wheels still squeak.  The kids no longer are here to play hide the eggplant.  The neighbors are out of town, just in case we try to share with them. 

But the garden still costs a lot more money to maintain than it saves you on grocery bills.  I did the rototilling for this year’s crop last April and I’m still walking like a man carrying a 50 pound stone on his back.  Got to get to the chiropractor!

May 04, 2009

Post #93 - Chuck Jaffe and Market Watch

Post #93

Part 4:  Good Advice, Bad Advice, and News About Investment People (continued)

Chuck Jaffe and Market Watch
Market Watch is a wholly owned subsidiary of Dow Jones and Company, which is owned by News Corporation.  News Corp. also owns the Wall Street Journal.  Rupert Murdoch founded and controls News Corp, although it is a publicly owned conglomerate.

Now that you know Rupert Murdoch is the unseen hand behind Market Watch and the Wall Street Journal, don’t be surprised if naked ladies start showing up on their websites.

Chuck Jaffe is a columnist for Market Watch.  I read his stuff every once in a while.  Paul Farrell is another columnist.  I mentioned him earlier in the blog.  I went through his Market Watch articles and didn’t see anything to help you guys, so stick with reading his book I mentioned in Post 44.  It’s called “The Lazy Person’s Guide to Investing.” 

Let’s talk about Jaffe.  Here’s a good article he wrote: Stock market's rally shouldn't alter your investment strategy

His message is that you must stick with your plan.  Just what I’ve been telling you!  I love it.

He also indicates that there are a number of people who found out in the last year that their portfolio allocation was too risky.  If they dialed down their equity holdings, maybe went from 80/20 to 60/40, because they realized they couldn’t handle the risk of an 80/20 portfolio, that’s OK.

I agree with that, too.  As I said earlier, it takes some experimenting before you find your risk threshold.

But he disparages those who panicked, threw their plan out the window, and are now trying to buy into the market again.  Again, I agree.  They are market timers and market timing just doesn’t work.

Here’s a column I don’t understand: Buy-and-hold investors must choose their sell-and-fold point.

This column is very confusing to me.  It seems to me that he’s saying something different than he said in the other link.  Does anyone have a clue as to how we can reconcile the two?

That’s the problem with having to write a financial column every couple of days.  Sooner or later you wind up saying things that don’t seem to agree with each other.

The one thing I absolutely agree with in the second link is the idea that you must change your asset allocation plan if your circumstances change.  If you lose your job, if your spouse dies, if you become partially disabled, if anything serious happens in your life, you need to reevaluate.  Absolutely.

Although it’s not clear, I think the second link is targeted to older investors who are nearing retirement.  Younger investors don’t have to make a choice between dog food and a comfortable retirement.

Finally, why doesn’t Mr. Jaffe explore the idea of changing your asset allocation strategy as you age?  That’s what I recommend.  Be aggressive when you are young.  But as you age you can’t afford to have 80% of your money in equities.  At least most people can’t.  If you will need that money to live on a few years from now you better not put it into equities.  By adjusting your plan to be 50/50 or 40/60 or something else as you approach retirement, aren’t you protecting yourself from the dog food?

By the way, I talked about Suze Orman in an earlier post.  Mr. Jaffe is not a big fan of hers.  Here is something he wrote in 2007: Outing Suze Orman's investment portfolio.

Of course, it worked out pretty well for her.  I think that if I had $27 million, I would squirrel most of it away too.  I’m not that greedy.  Don’t need $50 million.  How much wine can I drink, seriously?

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