August 5, 2022 Last week we got the Q2 GDP numbers and the Bureau of Economic Analysis (BEA) confirmed that GDP has now declined for two consecutive quarters. What do I make of that? Are we in a recession now? Since several people asked me to comment on this issue, here are my thoughts… In … Continue reading Recession Or Not?
July 5, 2022 Over the last few decades, we’ve become accustomed to a negative correlation between stocks and U.S. Treasury bonds. Bonds used to serve as a great diversifier against macroeconomic risk. Specifically, the last four downturns in 1991, 2001, 2007-2009, and 2020 were all so-called “demand-side” recessions where the drop in GDP went hand-in-hand … Continue reading Hedging Against Inflation and Monetary Policy Risk
June 15, 2022 With the recent confirmation of a Bear Market finally taking hold, I’ve gotten some requests to comment on the situation: Are we going to have a recession? What’s my inflation outlook? What to expect from the Federal Reserve? What does this all mean for us in the FIRE community? Let’s take a … Continue reading The Bear Market is here. What Now?
June 6, 2022 In this year’s April Fool’s post, I marketed a made-up crypto coin that would completely hedge against Sequence Risk, the dreaded destroyer of retirement dreams. Once and for all! Most readers would have figured out this was a hoax because that complete hedge against Sequence Risk is still elusive after so many posts … Continue reading Hedging against Sequence Risk through a “Retiree-Saver Investment Pact” – SWR Series Part 53
April 25, 2022 If you remember my April Fools Day post from a few weeks ago, I poked fun at the proliferation of new crypto coins. Most of them are scams. But what about the mainstream crypto coins, like Bitcoin, Ethereum, etc.? Are they a good investment? What’s not to like about a 100%+ annualized … Continue reading Crypto is probably a bad investment!
April 1, 2022 If you’re familiar with my work on Safe Withdrawal Rates, you’ll know that the number one concern for retirees is Sequence of Return Risk. Well, hopefully, this will soon be a thing of the past. I’m now ready to announce the complete “retirement” (pun intended) of my Safe Withdrawal Rate Research because, … Continue reading Introducing the ERN-approved Crypto Coin
March 21, 2022 Last year in Part 49 of the Safe Withdrawal Series, I wrote a post about using leverage in retirement, and in today’s post, I like to explore some additional issues. A quick recap, the appeal of using leverage in retirement is that we would borrow against the portfolio instead of liquidating assets. … Continue reading Timing Leverage in Retirement – SWR Series Part 52
February 28, 2022 What a difference a year makes! In late 2020, only about 16 months ago, I felt the urge to comment on the then-fashionable discussion of how low inflation would impact retirees. See Part 41 – Can we raise our Safe Withdrawal Rate when inflation is low? of my SWR Series. Feels like … Continue reading Retirement in a High-Inflation Environment – SWR Series Part 51
January 13, 2022 According to the most recent inflation numbers that came out yesterday (1/13), CPI inflation is now running at 7% year-over-year. From September to December we saw a 2.2% increase, which is a 9.1% annualized rate. And it’s not all energy and food inflation. The core CPI is also elevated at 5.5% year-over-year. … Continue reading Inflation at 7%! Here’s why I’m not running for the hills (yet)!
January 3, 2021 Happy New Year, everybody. I hope you had a relaxing and healthy Christmas and a good start to the New Year! Last month was the 5th anniversary of the Safe Withdrawal Rate Series! In December 2016, I published the first part of that series. I had material for maybe four or five … Continue reading Ten things the “Makers” of the FIRE movement don’t want you to know – SWR Series Part 50
December 9, 2021 Last month, I published Part 49 of my Safe Withdrawal Rate Series, dealing with leverage in retirement. In that post, I surmised that the cheapest form of leverage likely comes in the form of a margin loan in an Interactive Brokers (IB) account. If you have the IB Pro account you have … Continue reading Low-Cost Leverage: The “Box Spread” Trade
November 16, 2021 My Safe Withdrawal Series has grown to almost 50 parts. After nearly 5 years of researching this topic and writing and speaking about it, a comprehensive solution to Sequence Risk is still elusive. So today I like to write about another potential “fix” of Sequence Risk headache: Instead of selling assets in … Continue reading Using Leverage in Retirement – SWR Series Part 49
November 10, 2021 Welcome to a new post in the Put Option Writing Series. My blogging buddy Spintwig volunteered to perform another backtest simulation. If you remember from Part 5, he simulated selling 5-delta and 10-delta put options going back to 2018. He now added 18 more months of returns to go back to September … Continue reading Passive income through option writing: Part 9 – 2016-2021 backtest: Guest Post by “Spintwig”
October 27, 2021 Hi Everybody! Not a big blog post today, just a quick announcement: I will be heading to the 2022 Chautauqua in Ecuador as one of the invited speakers. The event will span an entire week: June 18-25 in 2022. So, if you want to spend a fun-filled week in a beautiful location … Continue reading 2022 FI Chautauqua in Ecuador
October 18, 2021 After three posts in a row about safe withdrawal rates, parts 46, 47, and 48 of the series, let’s make sure we have the right level of diversity here. Welcome to a new installment of the option writing series! I wanted to give a brief update on several different fronts: A quick … Continue reading Passive income through option writing: Part 8 – A 2021 Update
September 14, 2021 Last week, I had a bit of a mishap. I had a post scheduled for publication on September 9 but I got distracted and never completed it. So, on September 9, WordPress pushed out a mostly empty article, including the email notification to thousands of subscribers and Twitter notification. Oops! Sorry about … Continue reading Retirement Bucket Strategies: Cheap Gimmick or the Solution to Sequence Risk? – SWR Series Part 48
TBA As always, the truth is somewhere in between. Though, I’d place it closer into the “cheap gimmick” corner. Let’s take a look why… TBA Thanks for stopping by today! Please leave your comments and suggestions below! Also, make sure you check out the other parts of the series, see here for a guide to the … Continue reading Bucket Strategies: A Cheap Gimmick or the Solution to Sequence Risk? – SWR Series Part 48
August 18, 2021 In my post two weeks ago I outlined my approach to retirement planning: In light of significant uncertainty in retirement, I like to do a more careful, robust, and scientific analysis. Not because I could ever undo any of the existing uncertainties but because I don’t want to add even more uncertainties … Continue reading When to Worry, When to Wing It: Withdrawal Rate Case Studies – SWR Series Part 47
August 5, 2021 Welcome back to another post in the Safe Withdrawal Rate Series. For a quick intro and a summary of the series, please refer to the new landing page. Before I get started, though, you probably noticed that I have been offline for a while. Important business to take care of! The ERN … Continue reading The Need for Precision in an Uncertain World – SWR Series Part 46
July 1, 2021 Time flies! I can’t believe I already had my 3-year FIRE anniversary last month! Time to reflect and think back on the first three years of early retirement: travel, moving, “market timing”, dealing with the shutdown, and some other exciting news in the ERN retirement life. Let’s take a look… Oh, before … Continue reading Our Three-Year FIRE Anniversary