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Old 07-22-2016, 01:34 PM   #626
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Re: The "What the hell should I read?!" Thread. Books, Blogs, and News

need recommendations for a good macro book going into detail over the interconnections between fed rates, the dollar, commodities, currencies etc.
something on a intermediate to expert level would be preferred. something like one of Soros books although I heard his last one wasnt that great.
I think now more then ever, understanding these relationships deeply is important to running a portfolio.
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Old 07-27-2016, 12:57 AM   #627
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Re: The "What the hell should I read?!" Thread. Books, Blogs, and News

Does anyone have a good retirement book recommendation? One with standard, simple, unambiguous, practical advice meant for a layperson. I'm considering "How to Make Your Money Last" by Jane B. Quinn. The gift would be for somebody a few years away from retiring though and that book might be meant more for people who have already gotten to retirement in good shape.

I would highly recommend Lifecycle Investing by Ayres and Nalebuff, from what I've read so far. If somebody needed personal finance advice, first I'd advise them to read some basic book (not sure which), then Random Walk, then Lifecycle Investing. It's essentially a massive paradigm shift in investment allocation strategy that makes perfect logical sense and is thoroughly tested with historical data.

The key point is that you should be spreading your stock market risk exposure out better across time. With standard investing, you have a massive amount of your total lifetime savings invested in only the 10-20 years prior to retirement. Instead, the argument goes, you should use leverage earlier in life so that you're spreading the risk out over 44 years (the length of the buckets they used). So if standard advice and "lifecycle" funds do something like 90% equities in the beginning, ramping down to 50% at retirement (90/50), and a fixed strategy would be say 75/75 (always 75% equities), this advice is closer to something like 200/83 (start off leveraged 2x, retire at 83% equities).

They calculated 96 buckets of 44 years each using historical data going back 140 years, and 200/83 beats the others 100% of the time. (The numbers I'm using make this seem obvious because it's more equity exposure, but there's calculations done with the risk remaining the same as well and still coming out ahead). Even the worst case scenario beats the other worst case scenarios. It's less risk (if you want it to be), not more.

Practically though, I don't know. I'm not even sure if I'll do it to a full 200%, just because of logistics. Definitely worth a read though.

Another key point btw regards Social Security. You should be considering it part of your retirement "bonds" (obviously adjust if laws and benefits change), and if you're upset that you're not allowed to invest it how you want to, just increase your equity percentage and you're essentially doing so.
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Old 07-29-2016, 10:36 AM   #628
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Re: The "What the hell should I read?!" Thread. Books, Blogs, and News

Some more on the post above.

There are some further calculations done where your final % in equities would be even less than a standard plan, but you come out ahead anyway because you invested more in equities when you were younger. Lower risk.

Such an important point is the thing about investing your "Social Security" effectively however you want to. Same with say an inheritance you know is coming but the person just has it in a CD or something. You can effectively invest that now.
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