Baby boomers know about inflation, today’s 60 year old hit teenage years when the price of his Spirograph was shooting up in price by 24%. Spikes always occur, however from 1970 to 1980 the average of the annual inflation rates was 13.3%. Yikes.
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The 4% Rule was defined in America by Bill Bengen using US stocks and bonds records, along with US inflation. This is Bill's original essay and calculations. The study does not transpose to the UK because UK equity, fixed income and inflation levels are not the same; the principle is valid in the UK but not the calculation.
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This is what’s called macro – it’s to do with wealth in a country, a continent, the world, and within that macro environment we all exist, earn and pay our bills. The macro measures big ticket items, like the price of everything at the factory gate
We draw on Irving Fischer’s book “Money Illusion” and examine what inflation and deflations means to us.
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Warren Buffet first invested in Coca Cola in 1988. He (Berkshire Hathaway) now own 400m shares, 9.4% of that company.
As a result, on the 15th March of this year he received a payment of $168,000,000 from Coca Cola. In cash. It’s a quarterly dividend.
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In this free white paper, we argue that Modern Portfolio Theory is an inappropriate basis for generating a retirement or other long-term income for individual investors because their main objective is reliability of income, not capital growth.
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Latitude is a wonderfully inclusive festival where young people can be let loose and those of us theoretically more mature can do the same.
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Very little work is done to help people understand what risks they face with investments, and you’ll have had ‘investments may fall as well as rise, and you may not get back the money you invested’…until the cows come home.
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“People are coming into this time of life not wishing they were still working and productive, but quite the opposite. They’re saying: ‘Finally, I can do what I want, when I want and on my own terms. That’s what I’ve been dreaming of my whole life.'”
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The point is its not just about the money.
Arranging a reliable income is an enabler for people to do the things that financial security is intended to bring. The gift of time.
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Here we explore some of the new things we face as we grow older; providing care for our parents, writing a eulogy and more.
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Dr Harry Markowitz received the 1990 Nobel Prize for Economics as a result of his 1952 paper that defined Modern Portfolio Theory (MPT).
MPT has incorrectly been migrated from its intended use in the fund industry to investment planning for individuals: we provide Markowitz’s own evidence of that error.
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Research from the actuary Lane Clark & Peacock assessing modelling of retirement portfolios alongside consideration of relevant asset allocations for decumulation. It also outlines their thinking on why the heuristics on spending rules and portfolios need to be updated.
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Research from the perspective of a mathematical theorist examining the patterns and behaviours of trust dividend payments to determine confidence levels for future projections via algorithms, and, specifically, the correlations to be found within the trusts. This drills down into the actual volatility of income to determine whether or not the term ‘risk’ is being correctly applied to income streams.
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From an actuary’s perspective, the dividend returns of a pre-selected set of investment trusts are analysed to determine the mathematical relationship between demonstrable historical movements and future projections. It considers confidence levels within set bounds by calculating correlations and measuring causation effects, comparing model forecasts against actual portfolio returns.
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