Master Financial Education
Daily Commentary 2015

E. F. Moody Jr.


I have asked Errold Moody to provide a brief example of what he has actually found on behalf of a client who engaged his services to review the insurance contracts which funded the client's estate plan. You will be amazed. In my 30 years in the business, I have never seen an authoritative, objective, prudent expert speak so clearly on the use of insurance. What Errold can do is unique in the industry.

Steven Winks

Secretary of State John Kerry - In America,  "you have a right to be (as) stupid (as) you want to be."
(But too many Americans are abusing the privilege)

Why did our systems fail and why will they continue to do so?  From Paul Volcker

"our economics are based on “an unjustified faith in rational expectations, market efficiencies and the techniques of modern finance"

You must not believe everything you think

Stephan Thomas Vitas

You are entitled to your own opinion. You are not entitled to your own facts.

Kevin Kind

Words  are chosen in order to influence us as manipulable objects, not to inform us as autonomous subjects.

Stephen Colbert

Great spirits have always encountered violent opposition from mediocre minds 

Albert Einstein



These are not to be redistributed or used by anyone else in any manner whatsoever.

Uniform (Im)Prudent Investor Act- Waaaaaaaaaaaaaaaaaay Out of Date

World Clock by

 I now have contracted with one of the major professional (non industry) associations in the U.S. to provide videos on a host of financial issues to their members

3/15: Info only


3.25% for 5 Years

Issued Through Age 90

2.25% Commission to Age 90

3/12> It is true that emotionalism  by the bulk of consumers in a bear market causes untold calamity. If you are unemotional and use DCAD, you will beat most everyone in return by about 90% and reduce risk compared to them by close to 100%.

3/12 Roubini

The Mother of All Bubbles by 2017

"The dilemma facing the Fed, Roubini contends, is that if it tightens monetary policy too late, it could lead to 'the mother of all bubbles' by 2017. And if the Fed tightens too soon, it could cause a hard landing of the real economy.

EFM- sounds about right to me

3/12: Old and senile

 the rate of dementia among 60- to 64-year-olds is 0.8% and that rate doubles every five years. The rate of dementia among 80- to 84-year-olds increases to 12.8% and among the 85-and-older crowd, 30% are experiencing clinical dementia.

another study that found that 60% of those that are experiencing clinical dementia are still managing their own money. Only 30% of those experiencing clinical dementia reported delegating their money management to someone else.

EFM- Irrespective of dementia, the elderly have a F score on financial literacy to begin with and there is a loss of competency of 2% per year after age 65. Certain studies also indicate that their perception of competency INCREASES by the same 2% annually. A very dangerous combination

3/11: It's magic

In exactly the same way that we have given away our personal behavioral data to banks and credit card companies and wireless carriers and insurance companies and a million app providers, so are we now being tempted to give away our portfolio behavioral data to mega-banks and mega-asset managers and the technology providers who work with them. Don’t worry, they say, there’s nothing in this information that identifies you directly. It’s all anonymous. What rubbish! With enough anonymous portfolio behavioral data and a laughably small IT budget, any competent magician can design a Big Data system that can predict with 90% accuracy what you will buy and sell in your account, at what price you will buy and sell, and under what external macro conditions you will buy and sell.

By Ben Hunt. Read his stuff

3/11: Goor article on economic forecasting by the NY Times, but then...........

the market has been rising despite a barrage of corporate reports that might suggest that stock prices are overextended. After all, growth in both revenue and earnings for the last quarter has decelerated. For the 440 companies in the Standard & Poor’s 500-stock index that had reported by Wednesday, revenue for the fourth quarter rose only 1.5 percent over the period a year ago, compared with a 4.1 percent growth rate for the third quarter at the same point in the previous earnings season, Mr. Yardeni said.

Comparable numbers for earnings were an annual increase of 5.9 percent in the fourth quarter, versus a 10.4 percent rise at the same point in the previous earnings season. The strong dollar, falling oil prices and a sluggish global economy have all taken their toll.

What’s worse, guidance for future earnings turned extremely pessimistic.

EFM- so should you care that much? Well, how are you invested? To gain assets, quite obviously. But on the other side you are terribly concerned about a major drop. But you can only have a major drop in your equities if you want to. If you don't want to, then don't. You have to know how much a true correction is (percentage) and then DCAD. Pretty simple actually.
Of course pundits will tout the element of emotionalism. Fair enough but then they are naive investors knowing little and forgetting much. Very little you can do with them if they are not willing to learn. Do people learn? In school, some do. Afterwards, not really. The validation is in reviewing financial literacy scores. Some of the research resides in material below,  

Drug Dispensing and the Caregiver

By M. Simon


One of the common issues that caregivers have to deal with on a daily basis is the need to dispense their care recipient’s medication in a safe and timely fashion. Navigating the dangerous waters of different pill sizes, colors and dosages can be an intimidating experience as most family members and home care workers possess neither an in-depth knowledge of these medications nor the ability to discern when a problem with the pills may be developing. Elderly and infirm clients often seem to be on a never ending slew of pills that need to be doled out on a regular basis. It doesn’t matter that the clients have accumulated them honestly, usually a few at a time during each hospital admission; but the sum total is what the home care worker, family member or employee, must face every day on the job.

In past years, medications were often dispensed three or four times per day or worse. Thankfully, in our modern day, each medication only has to be taken once or twice every twenty-four hour period. The downside is that there are a lot more diseases we can treat and consequently a lot more pills people can consume.
In an effort to decrease the angst this process can cause and keep the client on a safe and effective regime, there are several simple rules one can follow.

First of all, it’s a good idea to keep all medications in a safe and secure place. Playful grandchildren, nosey visitors and even confused patients will get into the pill bottles if they’re left unattended. Some medications have to be refrigerated, but most can be safely stored in a secure cupboard. Pharmacies, in an effort to keep your business, have developed blister packs that link the pills with specific days of the week. So, in the middle of a busy day, if the caregiver suddenly wonders “Did I give him his morning pills?” all it takes is a quick look at the package to confirm that, yes, it was given. In the same vein, all medications should be administered at the same time every day. Modern pills have been designed for specific durations and maintaining a regular dosing schedule will decrease the risk of adverse reactions.

Not to overstate the obvious, but dosages of drugs should not be changed without first consulting the client’s physician. The old adage “If one is good, two is better” does not apply in these situations. Playing with the dosages of blood thinners, heart pills and pain killers can easily have unforeseen and unfortunate side effects.

Despite what the infomercials say, don’t start using over-the-counter products, herbs, vitamins and supplements without first discussing it with a physician. Not only is quality control for these products somewhat lacking (as compared to prescription medications), but they may interact with the client’s normal medications by increasing or decreasing the medicinal concentration in the body.
Check the expiry date on the prescription bottle. Medications that are only used on an as-needed basis may become ineffective if left too long on the shelf. A good example would be nitroglycerin pills for chest pain or a ventolin inhaler for an asthma exacerbation. The one time you need it could be the time you discover it’s out of date. Likewise, it’s prudent to double check the prescriptions that are picked up from the pharmacy against a home list of medications being given. The employees filling the prescription are human too (and often pharmacy assistants) and can make mistakes.

There are also options to consider if the condition of the person you are caring for begins to deteriorate. For example, if problems  develop with his or her ability to swallow, there may be some pills that can be changed to a liquid or even given through a small butterfly needle in the skin. Some newer medications are actually a combination of two or three different drugs and using them could decrease the total number of pills consumed daily.

Another aspect to consider, especially if his or her condition is worsening, is whether they really require all those medications. If grandmother, who is well into her ninth decade, is truly failing, does she really need that cholesterol pill or that Alzheimer’s drug? Maybe it’s time to have a family discussion with the physician and ask the question, “Have we reached the point where we are treating the disease instead of the patient?” One of the benefits of modern medicine is that we have so many wonderful drugs to combat the detrimental aspects of aging and disease. However, just because these drugs now exist doesn’t always mean it’s in the best interest of the client to use them.

The use of medicines is one aspect of caregiving that will not disappear in the foreseeable future. It is a complicated and precise job that requires concentration and adherence to a rigorous schedule. The aforementioned tips are meant to simplify this task and make life that much easier for the caregiver in your family.

3/11: Job Changes in the last decade

So if it doesn't make sense to do a regression analysis/monte carlo  on job changes with the idea that the future will be like the past, why do it with returns????

3/11: A lot of falls are due to drinking

March is Brain Injury Awareness Month 
Traumatic Brain Injuries can Result from Senior Falls


Traumatic brain injuries due to falls caused nearly 8,000 deaths and 56,000 hospitalizations in 2005 among Americans 65 and older, according to a new report from the Centers for Disease Control and Prevention released in the June issue of the Journal of Safety Research.

Traumatic brain injuries, or TBIs, are caused by a bump or blow to the head; however, they may be missed or misdiagnosed among older adults. TBI often results in long-term cognitive, emotional, and/or functional impairments. In 2005, TBIs accounted for 50 percent of unintentional fall deaths and eight percent of nonfatal fall-related hospitalizations among older adults.

Falls are not an inevitable consequence of aging, but they do occur more often among older adults because risk factors for falls are usually associated with health and aging conditions. Some of these conditions include mobility problems due to muscle weakness or poor balance, loss of sensation in feet, chronic health conditions, vision changes or loss, medication side effects or drug interactions, and home and environmental hazards such as clutter or poor lighting.

“Most people think older adults may only break their hip when they fall, but our research shows that traumatic brain injuries can also be a serious consequence,” said Dr. Ileana Arias, director of CDC′s National Center for Injury Prevention and Control. “These injuries can cause long-term problems and affect how someone thinks or functions. They can also impact a person’s emotional well-being.”

Each year, one in three older Americans (65 and older) falls, and 30 percent of falls cause injuries requiring medical treatment. In 2005, nearly 16,000 older adults died from falls, 1.8 million older adults were treated in emergency departments, and 433,000 of these patients were hospitalized. Falls are the leading cause of injury deaths and nonfatal injuries for those 65 and over.  
This study analyzed 2005 data from the National Center for Health Statistics’ National Vital Statistics System and the Agency for Healthcare Research and Quality’s Nationwide Inpatient Sample.

Key findings are:

  • Death rates for fall-related TBIs were higher among men than women (26.9 per 100,000 and 17.8 per 100,000, respectively).

  • Rates for fall-related TBI hospitalizations were similar among men and women (146.3 per 100,000 and 158.3 per 100,000, respectively).

  • Death and hospitalization rates for fall-related TBIs generally increased with age.

Additional findings:

  • The majority of men and women hospitalized with a fall-related TBI spent two to six days in the hospital (54.9 percent of men; 61.5 percent of women).

  • The median total charges for these hospitalizations were $19,191 for men and $16,006 
    for women.

Arias also points out that as more baby boomers reach retirement age, these types of injuries will increase demands on the health care system unless action is taken to prevent the injuries. “CDC has developed tips and suggestions for older adults, their caregivers, health care providers, and communities to help prevent falls,” Arias said.

For older adults, their children, caregivers, and health care providers, CDC recently developed the “Help Seniors Live Better, Longer: Prevent Brain Injury” initiative. Developed in collaboration with 26 organizations, it features easy-to-use English- and Spanish-language materials in a concise question-and-answer format to help prevent, recognize, and respond to TBI. For more information and materials, visit

CDC has also created resources for practitioners and community-based organizations. “Preventing Falls: What Works. A CDC Compendium of Effective Community-based Interventions from Around the World” and “Preventing Falls: How to Develop Community Based Fall Prevention Programs for Older Adults” can be downloaded or ordered at


3/11: LTC-
Rates for long-term care 
insurance, which can help pay for care in your own house or in a nursing home, rose this year an average of nearly 9 percent

A healthy 55-year-old man can now expect to pay, on average, $2,075 per year for $164,000 in initial benefits, up from $1,765 last year,

The cost for a healthy, single woman of the same age is higher: Her average premium is $2,411, up from $2,307. Insurers take gender into account when pricing long-term care policies, since, statistically, women live longer and are more likely to need long-term care.

Couples generally get a discount if they buy a joint policy; the rationale is that one or the other is likely to provide some care for a spouse initially, Mr. Slome said. A married couple, both age 60, would now pay $3,930 combined, up from $3,840, for $328,000 of initial coverage.

The numbers assume a “three-year” policy that uses a daily benefit of $150 to compute a maximum payout, and includes inflation protection — a 3 percent compounded annual increase in benefits. Eliminating inflation protection greatly reduces the cost — the average premium for a single man would be cut roughly in half — but that means you will probably have to pay more out of pocket if you eventually need care. A middle option, which costs more than the base premium, allows the choice of adding inflation protection later.

3/10:  India rape


ine months after India was rocked by the gang rape and murder of a young physiotherapist on a Delhi bus, popular Bollywood actress Kalki Koechlin made a satirical video called “Rape: It’s your fault”.

In three-and-a-half minutes of very black humour, the actress mocked pervasive patriarchal attitudes — expressed openly by Indian public figures — that blamed urban women and their conduct for the rising violence against them

Now New Delhi has gone into overdrive trying to prevent further broadcasts of a BBC documentary that exposes the chauvinistic mindset of one of the men convicted in the notorious 2012 case.

In the film India’s Daughter , aired in the UK on Wednesday night, Mukesh Singh, who has been sentenced to death for his role in the attack, expresses no remorse, and blames the young woman for her own fate, saying she should have neither been out at night nor resisted the assault.

“A girl is far more responsible for a rape than a boy,” the convict told Leslee Udwin, the British director, in a chilling interview filmed in New Delhi’s Tihar jail. “A decent girl won’t roam around at 9 o’clock at night.” Calling her death an “accident,” Singh added, “when being raped, she should not fight back. She should just be silent and allow the rape”.

EFM- I know that Modi is trying to clean up India but with the pervasive attitude towards women, it;s going to take some time. Same with a lot of other countries

3/10: The 50 US state economies from worst to best


MILLIONS AND MILLIONS OF MILLLENIALS - According to projections from the U.S. Census Bureau, the "Millennial" generation is expected to surpass the Baby Boom generation as the country's largest living generation this year. Millennials are ages 18 to 34 this year. They are projected to number 75.3 million this year, up from 74.8 million last year, an increase due in large part to the many immigrants. Baby boomers - ages 51 to 69 - peaked at 78.8 million in 1999 and are projected to drop to 74.9 million.  Then there is Generation X - ages 35 to 50 this year - is projected to number around 66 million this year. Millennials have to a considerable extent fared poorly in financial terms, due in part to recessions, a sluggish recovery, and student loan burdens. The Census Bureau recently reported that 30.3% of Americans 18 to 34 years old are living with their parents, up from 22.9% in 1980. See this link for more on "generations."


HOME OWNERSHIP LOWEST IN 21 YEARS - The home ownership rate in the United States has fallen to its lowest level in more than two decades, giving the rental market a boost. According to new figures from the Census Bureau, the rate was 64% in the fourth quarter of 2014. That is the lowest rate since the second quarter of 1994, when it stood at 63.8%. New York had the lowest homeownership rate in the last quarter, 53.1%, followed closely by California at 53.2%, and Nevada at 56.8%. The District of Columbia's rate is lower than any state's, 41.2%. The highest rate is in West Virginia (77.5%), followed by Delaware (74.3%) and Vermont (73.2%).

3/10: Roubini
The Negative Way to Growth? by Nouriel Roubini -Project Syndicate

Monetary policy has become increasingly unconventional in the last six years, with central banks implementing zero-interest-rate policies, quantitative easing, credit easing, forward guidance, and unlimited exchange-rate intervention. But now we have come to the most unconventional policy tool of them all: negative nominal interest rates. 

3/10: The idiot forescaster

On average, chief market strategists' forecasts are worse than those made by a guy I call the Blind Forecaster. He's a brainless idiot who assumes the market goes up 9% -- its long-term historic average -- every year, regardless of circumstances.

Some quick math shows the strategists' forecasts were off by an average of 14.7 percentage points per year.

How about the Blind Forecaster? Assuming the market would rise 9% every year since 2000 provided a forecast that was off by an average of 14.1 percentage points per year.

Underperforming the Blind Forecaster isn't due to 2008, which forecasters like to write off as an unforeseeable "black swan." Excluding 2008, the strategists' error rate is 12 percentage points per year, versus 11.6 percentage points per year for the Blind Forecaster.

3/10: Maybe we should do the same??

Pensions civil servants face cuts of a third


More than a third of staff at the Department for Work and Pensions are expected to lose their jobs in the next five years as Whitehall leaders brace themselves for more sweeping cuts across the civil service after the general election

3/9: working longer:

Early retirement, it turns out, is bad for your physical and emotional health. The World Health Organization estimatesthat a suicide occurs every 40 seconds worldwide. The highest rates, for both men and women in almost all regions, are among those 70 and older.

In 2013, France’s federal health agency INSERM studied dementia prevalence among 429,000 people. Controlling for the possibility that some people retired because of their dementia, they found that jumping ship at 60 increased your risk for the illness by about 15 percent, compared with those who waited an extra five years before hanging up their hats. They concluded that work keeps our brains young and fit. Meetings can be stressful, but binging on reruns is actually unhealthy.

 than two-thirds of today’s adults, or 68.8 percent, are overweight or obese.

Rates of child obesity are even more troubling, having grown from 7 percent in 1980 to 18 percent in 2012. Being overweight burdens the entire body and can even cut short a person’s career. In 2009, a study published in Obesityfound that overweight status at 25 and the eventual slide into obesity in middle age was associated with earlier retirement due to poor health. “They essentially have less vitality,” Fries says of the younger generations, “because of the problems that go along with obesity.”

Perhaps more important, climbing rates of Alzheimer’s disease—and FaceTime replacing actual face time—are combining to make trouble upstairs, in the brain. In 2013, the nonprofit organization Alzheimer’s Disease International shook the medical community with the prediction that by 2030 worldwide dementia rates will double, and by 2050, they will triple. Millennials are doomed to be the most dementia-racked generation ever. As it stands now, medical science has no tools to stem the tide of Alzheimer’s; it can only watch as the disease overtakes its victims without mercy.

3/9: Flat fees

New rules forcing fund supermarkets to reveal their pricing structures have prompted more wealthy self-directed investors to move their money, research shows.

Direct-to-consumer fund supermarkets that charge flat fees, an arrangement that benefits those with large amounts of money to invest, have seen a steep increase in the average size of customer accounts, according to research by The Platforum, a business information company.

The average account size on fixed-fee platforms, which include Alliance Trust Savings, Interactive Investor and The Share Centre, increased 22 per cent to £44,403 between the end of September 2013 and the same date in 2014, the research shows. These platforms charge a fixed monthly or quarterly fee regardless of the sums invested.

3/9: Michael Lewitt

February 13th marked the 25th anniversary of the bankruptcy of Drexel Burnham Lambert. I remember driving to work at Drexel’s Beverly Hills office that morning having no idea what was about to happen. My years at Drexel in the late 1980s and those I spent managing the firm’s private equity holdings in the 1990s were an intensive education in credit and human nature. Twenty-five years after Drexel’s demise and seven years after a crisis that pushed the global economy to the brink of collapse, the world is drowning in debt and derivatives. As a point of reference, when Drexel filed for bankruptcy, it had a balance sheet of $3 billion. When Lehman Brothers filed for bankruptcy in 2008, its balance sheet was two hundred times larger at $600 billion. As Figure 1 below illustrates, debt has grown exponentially while the global economy has crept along at a petty pace. Six years after the financial crisis, interest rates have been driven below zero in much of the developed world,2 a sign that policy makers have failed to create sustainable economic growth. (The latest tally is that $1.9 trillion of European sovereign debt is trading with negative yields.) They have managed to inflate financial assets but left the real economy behind. For example, U.S. equity prices have gained 122% since 2009 while US nominal growth has grown by only 18% over the same period. Having exhausted their ability to employ interest rates as a policy tool, policy makers are now shifting their sights to currencies to stimulate growth. But currencies are themselves nothing more than a form of debt, a promise by a sovereign. And those promises are being actively debauched in a series of currency wars that are certain to end badly for those who depend on fiat money for their daily bread...


Sleep disorders are a significant source of concern — especially in the geriatric population. Changes in sleep patterns are part of the normal aging process, but sleep disorders have been implicated with increased mortality, and side effects such as dementia, cognitive impairment and falls. This week, the National Sleep Foundation urges everyone to celebrate sleep and its health benefits for National Sleep Awareness Week. We’ve put together an overview of why sleep is critical for senior health, how conditions such as Alzheimer’s disease can change sleep patterns, and what caregivers can do to make sure they get enough rest.

Sleep Deprivation and Insomnia Increase Dementia Risk

We all know a good night’s sleep is the key to feeling energetic and clear-headed the next day, but sleeping soundly is also linked to a lower risk of cognitive impairment later in life. Unfortunately, older adults are more likely to have health issues that disturb their sleep, such as insomnia or sleep apnea. A 2011 study at the University of California, San Francisco, showed a clear association between sleep-disordered breathing in older women and the risk of cognitive impairment.

“Those who developed disruptions of their circadian rhythm were also at increased risk,” reports NPR. “So were those who awoke throughout the night, tossing and turning.”

For seniors who are under some form of psychological stress, this link may be even stronger. Not only does stress affect our sleep patterns, stress in itself has been associated with dementia risk. A study in 2010 found a link between stress in middle-aged women and the later development of dementia, particularly Alzheimer’s.

Dr. Kristine Yaffe, who co-authored the UCSF study, advises older adults to get regularly screened for sleep problems, so that any issues can be caught early and treated before they lead to significant cognitive impairment.

Alzheimer’s, Sleep Problems and Sundowning

Sleep problems are even more pronounced in older adults with Alzheimer’s. Brain changes associated with the disease are the underlying cause of issues such as difficulty sleeping, nighttime wandering, daytime napping, shifts in the sleep/wake cycle, and late-afternoon/early-evening agitation referred to as “sundowning.”

Aging sometimes causes a natural disruption of Circadian rhythms — our daily cycles of waking, sleeping, body temperature, and metabolism — a disruption which is often significantly worse in those with Alzheimer’s, reports the National Sleep Foundation. In fact, the Alzheimer’s Association notes that “in late stages of Alzheimer’s, individuals spend about 40% of their time in bed at night awake and a significant part of their daytime sleeping.” Sleep disruptions, in turn, are one of the factors that contribute to sundowning behavior.

If your loved one shows increased mood swings, confusion, memory loss, or even anger as the day winds down, there are several coping strategies caregivers can use to improve sleep for seniors, including establishing a daytime routine that includes some degree of physical activity.

Caregivers Need Sleep, Too

Study after study has shown that caregivers need a good night’s sleep just as much as their loved ones do. According to a report from the National Alliance for Caregiving, stress and depression are common in caregivers, and 87% of those surveyed reported problems with sleep and energy levels. Many caregivers said that their sleep was interrupted during the night, sometimes several times a night, while others said it was the stress of their responsibilities keeping them awake.

The National Sleep Foundation reports that “sleep problems among caregivers increases the likelihood of Alzheimer’s patients being cared for in an institutional facility,” as well as taking its toll on the health of the caregiver. It’s therefore especially important for caregivers to care for themselves as much as possible, adopting healthy day-to-day habits as well as taking longer breaks as needed, such as those provided by respite care or “dementia camp.”

  1. The equity risk premium: a review of models




Duarte, Fernando M. (Federal Reserve Bank of New York) ; Rosa, Carlo (Federal Reserve Bank of New York)

We estimate the equity risk premium (ERP) by combining information from twenty models. The ERP in 2012 and 2013 reached heightened levels—of around 12 percent—not seen since the 1970s. We conclude that the high ERP was caused by unusually low Treasury yields.

3/8 UK is better than us.The UK will announce plans on Friday to cap charges on new products designed for people drawing down their pension savings after claims that the public could be charged excessive fees.

The Labour leader’s latest market intervention reflects concerns that people exercising new freedoms over their pension savings could be exploited by companies offering new products.

A market survey of drawdown products by Which? found big variations in annual charges between companies and even with the same pension provider. “Our research uncovered several high-charging drawdown products, including one that charges 2.76 per cent,” said Which?. “We think this is too high for the mass market and want to see a cap introduced on products sold to customers by their existing provider.”

Which? said a saver with a typical £36,000 pension pot, taking £2,000 a year in income drawdown, would save £10,300 over their retirement if charges were capped at 0.5 per cent instead of 2.75 per cent.

3/8:Falling Marriage Rates Reveal Economic Fault Lines


There has been a long decline in married households in the United States.

72.2% in 1960

68.6% in 1970

62.3% in 1980

50.5% in 2012

3/8: Generational differences force re-examination of workplace retirement education

In the past five years, employers have realized just how precarious a position their employees are in when it comes to retirement and they have begun to put plans in place to help get them moving in the right direction.

A report released this week by Financial Finesse, a provider of financial wellness programs, shows just how ill-prepared baby boomers, Gen Xers and millennials are for retirement.

In the case of baby boomers, they are generally doing well financially but “those who are unprepared for retirement have little time to save, and even those who are prepared face some financial risks.”

Employers are becoming more aware of their employees’ financial situations, particularly when it comes to older workers.

“We’ve seen an increase in their urgency and willingness to dedicate teams to this by building financial wellness programs,” said Liz Davidson, CEO of Financial Finesse. “People are designing and monitoring these programs and the budget dollars have gotten much larger. They are also doing much more analysis on behavioral change and what is triggering the behavioral change.”

EFM- None are teaching risk cause they have never been taught it. Nor how to mitigate almost all major losses.

3/8: Stress

Can employees stressed out about their personal finances be as productive as those who are not? Not likely. Survey data supports the intuitive answer. For example, 41% members of the Society for Human Resource Management responding to a poll last year reported that an “overall lack of monetary funds to cover personal expenses” took a toll on some of their employees’ output levels.

The assumption seems to be not that employees aren’t paid a living wage, but that they have some shortcomings in their personal financial management skills.

3/8: Suicide
Suicide is the second-leading cause of death among children and young adults aged 10 to 24. In 2012, more than 5,000 teens and young adults died by suicide.Results of the analysis indicated that, during 1994-2012, suicide rates by suffocation increased, on average, by 6.7 percent and 2.2 percent annually for females and males, respectively,"

3/8: Most countries can't get inflation high enough. But...........

The government of Brazil’s President Dilma Rousseff is being forced to allow energy and fuel prices to rise after earlier subsidising them in a bid to boost consumption and spur the country’s slowing economy.

This has fuelled inflation, which grew at a monthly rate of 1.24 per cent in January compared with December, or an annualised rate of 7.14 per cent — exceeding the central bank’s target range of 4.5 per cent plus or minus two percentage points.

EFM- I gave up on Mexico and South America years and years ago. Huge graft and terrible economics.

What to look for in a Nursing Home

Yes, it is long but it's necessary for you or your parents.


Use the following checklist to assist you in assess nursing homes. If possible, both the caregiver and care recipient should be involved in the decision making process. The more an older person participates in the planning process, the easier it will be to adjust to the new environment.

The Facility

  • Are there handrails along the walls?

  • Are the doorways wheelchair-accessible?

  • Does management take safety precautions to prevent residents from falling down stairs?

  • Is the floor kept dry and free of litter?

  • In case of fire, can the facility be easily evacuated?

  • Are fire extinguishers easy to locate?

  • Does the facility appear clean?

  • Are there lingering odor?

  • Do the faucets, call buttons, telephones, and television sets work?

  • Are heating and cooling adequate?

Staff and Care

  • Is the atmosphere pleasant?

  • Do staff seem to genuinely enjoy working with the residents?

  • Do staff appear to care about and respect residents?

  • Are residents treated as individuals?

  • Do the staff appear interested in the residents?

  • Do staff seem interested in speaking to visitors or residents?

  • Are your questions answered clearly, frankly, and in sufficient depth?

  • Do any other residents have conditions similar to your elderly relative's?

  • Are residents clean and adequately dressed?

  • Do staff appear to refrain from making unrealistic promises or predictions?

  • Are the rights of the residents clearly posted?

  • Is the food hot, attractive, and tasty?

  • Are special diets available? What kinds?

  • Does a resident have plenty of drinking water easily available?

  • Are planned, posted, and varied recreational and social activities available?

  • Do the listed activities seem interesting and appropriate?

  • Do most of the people at an activity program seem to be participating?

  • Are religious services held weekly?


  • Is the facility in good standing with the state inspectors?

  • Are fees competitive?

  • Have fees increased significantly in the past few years?

  • Is the structure easy to understand and reasonable?

  • Does the institution readily reveal what service are covered in the quoted fee?

  • What services are extra?

  • Is Medicaid accepted? Is Medicare accepted?

  • Are billing and accounting procedures understandable and acceptable?

  • Is transportation of patients provided?

  • Does a resident advisory council exist?

  • Are visiting hours reasonable?

  • Are therapeutic services available? (Speech, physical and occupational)

  • Are social work services or other mental health services available?

  • Are community organizations (library, church group, volunteers) involved?

  • Do the charge nurses, social workers, department heads, and top-level administrators have geriatric experience and/or education?

(c)Senior Living Alternatives, which, publishes FREE semi-annual guides to senior housing in the Detroit, Chicago, Cleveland, Cincinnati, Columbus and Toledo areas, and Milwaukee and Madison, Wisconsin. Call toll-free for free copy: 1-888-SLA-7276. For Nationwide Information, visit

What to Look for in Assisted Living Communities

Using the following checklist to assist you in assesses assisted living communities. If possible, both the caregiver and care recipient should be involved in the decision making process. The more an older person participates in the planning process, the easier it will be to adjust to the new environment.

Assessing an Assisted Living residence as you tour the facility:

  • As you arrive at the residence, do you like the location and outward appearance of the residence?

  • As you enter the lobby and tour the residence, is the decor attractive and home-like?

  • Did you and your potential resident both receive a warm greeting from staff welcoming you to the residence?

  • Does the administrator/staff call residents by name and interact warmly with them as you tour the residence?

  • Do residents socialize with each other and appear happy and comfortable?

  • Are you able to talk with residents about how they like the residence and staff?

  • Do the residents seem to be appropriate housemates for your loved one?

  • Are staff appropriately dressed, personable and outgoing?

  • Are the staff members that you pass during your tour friendly to you?

  • Are visits with the resident welcome at any time?

  • Is the community well-designed for resident's needs?

  • Are the recreational and non-living spaces free from storage items or other obstacles?

  • Is the floor plan easy to follow?

  • Are doorways, hallways and rooms accommodating to wheel chairs and walkers?

  • Are elevators available for those unable to use stairways?

  • Are hand rails available to aid in walking?

  • Are cupboards and shelves easy to reach?

  • Are doors of a non-skid material and carpets firm to ease walking?

  • Does the residence have good natural and artificial lighting?

  • Is the residence clean, free of odors and appropriately heated/cooled?

  • Does the residence meet local and/or state licensing requirements?

  • Needs assessments, contracts, costs & finances

  • Is there a written plan for the care of each resident?

  • How long after admission is this care plan written?

  • Are the family and resident involved in writing the care plan?

  • What is the procedure for assessing a potential resident's need for services and are those needs reassessed periodically?

  • Can a resident be discharged for refusing to comply with a care plan?

  • When may a contract be terminated and what are refund policies?

  • Are there any government, private or corporate programs available to help cover the cost of services to the resident.

  • Is a contractual agreement available to include accommodations, personal care, health care and supportive services?

  • Are additional services available if the resident's needs changes?

  • Are there different costs for various levels or categories of services?

  • How do you pay for additional services such as nursing care when needed on a temporary basis?

  • What are the billing, payment and credit policies? May a resident handle their own finances with staff assistance if able, or should a family member or outside party be designated to do so?


  • What is the policy on insurance and personal property?

  • Is staff available to meet scheduled and unscheduled needs?

Medication/health care

  • What is the residence policy regarding storage of medication, assistance with medications, training and supervision of staff and record keeping?

  • Is self-administration of medication allowed?

  • Who coordinates home care visits from a nurse, physical therapist, occupational therapist, etc. if needed?

  • Are staff available to assist residents who experience memory, orientation, or judgment losses?

  • Does a physician or nurse, visit the resident regularly to provide medical checkups?

  • What is the procedure for responding to a resident's medical emergency?


Is staff available to provide 24-hour assistance with activities of daily living (ADL) if needed?

ADLs include: __Dressing __Eating __Mobility __Hygiene and grooming __Bathing, __toileting __incontinence __Using the telephone __Laundry __Housekeeping in unit __Transportation to doctor, hairdresser, activities, etc. __Shopping __ walking/caring for pets. others:______________

Features of individual units

  • Are different sizes and types of units available?

  • Are units for single and double occupancy available?

  • Do residents have their own lockable doors?

  • Is a 24-hour emergency response systems accessible from the unit?

  • Are bathrooms private with handicapped accommodations to accommodate wheelchairs and walkers?

  • Are residents able to bring- their own furnishings for their unit and what may they bring?

  • Do all units have a telephone and cable TV and how is billing handled?

  • Is a kitchen area/unit provided with a refrigerator, sink and cooking element?

  • May residents keep food in their units?

  • May residents smoke in their units? In public spaces?

  • May residents have pets?

Social and recreational activities

  • Is there evidence of an organized activities program, such as a posted daily schedule, events in progress, reading materials, visitors, etc?

  • Do residents participate in the neighboring community?

  • Do volunteers, including family members, come into the residence to help with or conduct programs?

  • Does the residence require residents to undertake any chores or perform specific activities that benefit all residents?

  • Does the residence have its own pets or provide for pets to visit the facility?

Food Service

  • Does the residence provide three nutritionally balanced meals a day, seven days a week?

  • Are snacks available?

  • May a resident request special foods?

  • Are common dining areas available?

  • May residents eat meals in their units?

  • May meals be provided at a time a resident would like or are there set times for meals?

Senior Living Alternatives(c), which, publishes FREE semi-annual guides to senior housing in the Detroit, Chicago, Cleveland, Cincinnati, Columbus and Toledo areas, and Milwaukee and Madison, Wisconsin. Call toll-free for free copy: 1-888-SLA-7276. For Nationwide Information, visit

3/8" Genworth a major player in LTC policies:

We have concluded that we did not have adequate controls designed and in place to ensure that we correctly implemented changes made to one of our methodologies as part of our comprehensive long-term care insurance claim reserves review completed in the third quarter of 2014. As a result, we failed to identify a $44 million after-tax calculation error. Although this control deficiency did not result in a material misstatement in the consolidated financial statements, we have concluded a material weakness exists in the controls over the implementation of our long-term care insurance claim reserves assumption and methodology changes because such a misstatement could have occurred. We are currently working to remediate the material weakness ...  We cannot be sure when we will successfully remediate the material weakness or whether compensating controls will be effective b efore then in preventing or detecting material errors.

EFM- now I wonder what will happen to all the other companies selling any form of their policies.


3/8: Putting a Stop to Retirement Plan Leakage
"[P]roposals that have been suggested include: [1] Raise the age requirement for early withdrawal from 59-1/2 to 62 to match the earliest Social Security retirement age; [2] Limit balances for in-service withdrawals to only employee contributions; [3] Tighten hardship rules even more and only allow hardships in case of 'unpredictable events,' for both 401(k) plans and IRAs; [4] Remove cash-outs altogether (this will mostly likely be met with resistance from plan sponsors because small balances can be expensive and burdensome to administer)."
(Milliman Retirement Town Hall) 

EFM- it's a good start

3/8: Howard Marks-

In periods when the markets do not change dramatically, most investors get it right most of the time but it does not make them any money. It is very valuable to forecast radical changes, as in the case of oil prices, but most people don’t get this right and this makes forecasting so unavailing. When something radical happens, someone gets it right, but Marks asks himself did this person get anything else right before or after, or do they just take extreme positions? 

“It’s not what you don’t know that gets you in trouble but what you know for certain that just ain’t true.”

Mark Twain

If you think the same as everybody else, you will act the same as everybody else. If you act the same as everybody else, you will perform the same as everybody else. If you want to outperform, then you have to think differently and act differently with higher level thinking.

With first-level thinking, an investor thinks that a company is great and buys the stock. With second-level thinking the investor thinks that the company is great but not as great as everyone thinks and therefore sells the stock. Marks described first-, second- and third-level thinking in the context of Maynard Keynes’ observations in predicting winners in newspaper beauty contests in London in the 1920s. With first-level thinking, you pick the winner based on your opinion. However to win the contest you need to have at least second-level thinking and pick the girl who you think will get the most votes.

Ben Hunt provided further details on Keynes’ observations of third-level thinking on his Epsilon Theoryblog. Hunt stated that to win the contest you have to make a third-level decision and pick “who will get the most votes when all the voters are basing their votes on who they think will get the most votes”.

I'm not sure the liquor makes any difference

3/8: China's slowdown will negatively impact us (doesn't take any brains for that) but I have no idea how bad it will be

China will target economic growth of “around 7 per cent” this year, Premier Li Keqiang told parliament on Thursday, signalling that the leadership expects the country’s economy to slow further following the slowest expansion for 24 years in 2014.


from the whitehouse

3/8: As Australia goes, so I think we will as well

Australians face a future of lower economic growth, falling living standards and increasing public debt unless they embrace structural reforms that meet the challenges posed by an ageing population, a government report has warned.

“Ongoing deficits and rising debt is not sustainable. We need to be better placed to respond to the potential for future economic downturns and pressures on the budget as we live longer."

Seem familiar????????????

3/8: Amaranth

Marks went into further detail on luck and skill in describing the 2006 collapse of the hedge fund Amaranth. Marks said that Amaranth lost 90% of its assets not due to poor bets in 2006 but because of their success in 2005 when they were up 100%. He offered that “losing 100% is only the flip side of making 100% if there is no skill.” Marks said Amaranth made some “wild ass” bets in 2005 and got lucky and then made similar bets in 2006 and got unlucky.

3/5" Indexing" the percentage of institutional investments in index-tracking strategies is small — about 19.2 percent for public pension plans and 11.2 percent for corporate plans

"If you want to outperform, then you have to think differently and act differently with higher level thinking," and that "if you have enough aggressiveness at the right time, you don’t need any skill."

Howard Marks

3/5: Military families are falling behind in financial literacy (Think Advisor)

Military families are becoming increasingly disconnected with their financial realities. A report commissioned by First Command Financial Services Inc. and the First Command Educational Foundation showed middle-class military families posted an average score of 69 on its financial literacy test, the first failing grade since the program's launch in 2012.

3/4: Volatility


10 Steps to Kidney Health

Recent studies indicate that 26 million American adults suffer from chronic kidney disease (CKD) and that the number is likely to rise unless Americans get serious about prevention. March is National Kidney Month and World Kidney Day 2015 is March 12. This is the perfect time for responsible adults to begin a kidney-health program by learning about the risk factors for CKD.

Primary risks include: diabetes; heart disease; high blood pressure; a family history of kidney disease; and age 60-plus.

Secondary risks include: obesity; autoimmune diseases; urinary tract infections and systemic infections.

Below are 10 important steps from the National Kidney Foundation to protect kidney health.

10 Ways to Keep Kidneys Healthy

  1. Exercise regularly

  2. Don’t overuse over-the-counter painkillers or NSAIDs

  3. Control weight

  4. Get an annual physical

  5. Follow a healthful diet

  6. Know your family’s medical history

  7. Monitor blood pressure and cholesterol

  8. Learn about kidney disease

  9. Don’t smoke or abuse alcohol

  10. Talk to your doctor about getting tested if you’re at risk for CKD

The National Kidney Foundation will also offer free kidney screenings to people at risk for CKD in a number of cities across the country on World Kidney Day (March 14, 2014). For locations and schedules,click here.

This article was is courtesy of the National Kidney Foundation.  For more information about kidney health or the foundation, visit their website at


The Average Retirement Age – An Update

byAlicia H. Munnell


The brief’s key findings are:

  • Labor force activity among older Americans began rising in the mid-1980s due to:
    • changing Social Security incentives;
    • the shift to 401(k) plans; and
    • improving health, longevity, and education.
  • Updated data, however, suggest that these factors may have played themselves out.
  • As a result, the average retirement age has increased only slightly in the last 10 years: to 64 for men and 62 for women.

This device, called the “Iter Avto” was the first ever attempt at  having a GPS in the car, except this obviously didn’t use satellites. The device came with a set of paper maps that could be attached to a scroll. These were wound from one roll to another across a display and a cable connected to the speedometer controlled the scroll rate. The speed with which the display moved was proportional to the speed of the car so it always showed the correct point. Pretty  high-tech for 1930!

3/4: Asset class correlation assumptions


Table 3: Asset class standard deviation assumptions

Asset Class Standard Deviation (Annualized)
US Stocks 16%
Foreign Developed Stocks 18%
Emerging Market Stocks 24%
Dividend Growth Stocks 14%
US Government Bonds 5%
Corporate Bonds 5%
Emerging Market Bonds 7%
Municipal Bonds 5%
Real Estate 18%
Natural Resources 18%

Table 4: Asset class expected real returns

Note: long-term inflation expectation is 2%.

Asset class CAPM Return Wealthfront View Black-Litterman
Gross Return
Net-of-Fee Return
US Stocks 5.3% 4.3% 4.6% 4.5% 3.9%
Foreign Stocks 6.2% 3.3% 5.3% 5.2% 4.4%
Emerging Markets 8.1% 5.4% 7.0% 6.8% 5.9%
Dividend Stocks 3.7% 5.3% 3.5% 3.4% 2.5%
US Government Bonds -0.8% -1.5% -0.9% -1.0% -1.4%
Corporate Bonds -0.2% 1.0% -0.3% -0.4% -1.1%
Emerging Market Bonds 1.0% 2.0% 1.1% 0.8% -0.5%
Municipal Bonds -0.8% 1.0% -0.7% -0.9% -1.0%
TIPS -0.5% -2.3% -0.7% -0.8% -1.2%
Real Estate 5.0% 3.5% 4.4% 4.3% 2.7%
Natural Resources 4.0% 4.0% 3.4% 2.7% 2.4%

1930 car elevator. Unbelievable
3/4: Roubini

Why negative interest rates could become the new normal

 One still might think that it makes sense to hold cash directly, rather than holding an asset with a negative return. But holding cash can be risky, as Greek savers have learned

Monetary policy has become increasingly unconventional in the last six years, with central banks implementing zero-interest-rate policies, quantitative easing, credit easing, forward guidance, and unlimited exchange-rate intervention. But now we have come to the most unconventional policy tool of them all: negative nominal interest rates.

Gross has said similar. So when I say that this is a fabricated economy, I also mean that historical number crunching may be a thing of the past. Looking forward will have lower rates and yields and th volatility will be greater.


Correlation & Dispersion Index Dashboard


  Download this month's dashboard


Warning signals were flashing in European correlation levels prior to the European Central Bank's much-anticipated stimulus package at the end of last month; since the announcement, correlations have collapsed along with volatility levels in developed markets.


February’s 0.11 correlation for the S&P Europe 350 was the lowest since at least 2007, and similar record-low correlations were recorded in the S&P SmallCap 600®, the S&P Emerging BMI and the S&P Developed Ex-U.S. LargeMidCap.  Every single correlation measure was in the lowest quartile of its historic range.


Dispersion in each market remains high relative to recent history.


Below are the historical annualized real returns for stocks from 1970 to 2013 using the Dimson, Marsh, and Staunton data. 

Austria 3.85%
Australia 4.51%
Belgium 5.97%
Canada 4.91%
Denmark 7.58%
Finland 8.56%
France 5.69%
Germany 5.02%
Ireland 5.57%
Italy 0.60%
Japan 3.28%
Netherlands 6.44%
New Zealand 4.75%
Norway 6.95%
South Africa 7.56%
Spain 3.49%
Sweden 9.04%
Switzerland 4.83%
UK 5.88%
US 5.97%

3/2: No One Should Expect Returns of 5%’: Research Affiliates

The numbers don’t lie, according to experts at Research Affiliates, and that means it’s time to scale back expectations when it comes to real returns in the coming decade.

“We’ve plotted it – there’s nothing above 5%,

And Robert Shiller  says that with a U.S. equity ratio of 27, we should expect lower future returns ahead.

EFM- I don' know about 5% but 6% that I would use now is not really much betterr

3/2: Say it  isn't so
When mystery shoppers visited advisers for a 2012 study, 85 percent were told to ditch their diversified, low-fee portfolios.

Commissions, including load fees and 12b-1 fees, give advisers an incentive to recommend certain investment products over others. Firms can also give advisers bonuses for steering client money into the firms’ own funds. The result of this biased advice is that investment performance suffers, academic studies show—and not just because fees eat into returns. A 2014 study compared self-directed investors with clients who received advice with conflicts of interest. The self-directed investors performed an average of 1.25 percentage points better annually. A 2009 study found that direct-sold funds beat broker-sold funds by 0.14 to 0.9 percentage point per year, even disregarding the broker funds' higher fees. Over time, that performance gap can cost you thousands, or tens of thousands, of dollars.

I dress up well

I never knew these even existed

3/1: Will the True Monte Carlo Number, Please Stand Up? By: Moshe A. Milevsky and Anna Abaimova

Note the termendous variability from the different products.

3/1: risk mansgement<

 '"Admittedly, some risk management is much better than none and I commend advisors who are pioneers in using this new technology. But the use of risk management in an advisory practice must rise to the critical next level. It must answer the ‘So what?’ question for the client, i.e., “Why exactly am I incurring this risk. If I am risking a large loss in a junk debt collapse or equity deleveraging, which specific goals am I reaching for? And if I reduce my risk, which goals do I need to give up?”

Advisors already answer these questions for their clients.  We are simply advocating that they connect financial planning to the rigorous risk management process. Risk tolerance is a very important concept, but it is not the only aspect of risk management. In fact, FINRA’s definition of suitability specifically includes the following:

“…customer’s age, other investments, financial situation and needs, tax status, investment objectives, investment experience, investment time horizon, liquidity needs and risk tolerance.”

Risk tolerance is one out of ten on this list. While we would agree that its importance far exceeds 10%, it is essential to address objectives, horizon, taxes and the like to truly add value for your clients"

EFM-read article below since I am providing the answer to both issues.

3/1:  Retiremenet spending and ARVA- ( annually recalculated virtual annuity) READ THIS CAREFULLY (below are excerts only)

[In other words, the problem is not to find the correct, single, constant spending rate for the entirety of one’s retirement, as many practitioners seem to assume. There is no such rate—unless the entire portfolio is engineered to perfectly hedge planned consumption (and all spending goes as planned!). The problem is to recognize that with any other investment strategy—one that includes unhedged risky assets—spending must vary as total asset values and interest rates fluctuate; there is no other safe way to meter spending so that there is no danger of the money running out.

 A simulation approach tries to balance the desire for higher spending against the chance that the investor will run out of money, but we want an approach that guarantees that the portfolio will not be depleted, even if the investor is holding risky assets. Adjusting one’s spending is tolerable but ruin is not; therefore, we present an alternative to the probabilistic approach. Our innovation is important in both theory and practice: In the literature, the possibility of running out of money is said to have infinite disutility, meaning that any nonzero probability of ruin should be avoided entirely. This objective simply makes sense, even in a country such as the United States, where there is a Social Security safety net.

................... and readers of this article will see that a universal 4% or 3% answer is necessarily in error. At best, it is a heuristic usable only for certain combinations of specific retirement horizons and real interest rates—a fact that is obvious once stated but that is left out of much of the adviser literature. (EFM: I repeat- it is necessary to compute some conservative number for the asset base for the retiree looking at an acturarial lifetime plus a fudge factor. See the comments in the  risk of loss video.)

The ARVA strategy can be derived from an annuity payout calculation, repeated each period; simulations and other fancy techniques that accept some probability of ruin are not required. Of course, this ARVA strategy gives a completely stable real spending rate only if one invests in the nearly riskless TIPS ladder, the true risk-free asset allocation policy. The primary focus of this article, however, is on those who do not invest in a ladder of TIPS to fully hedge spending but instead choose to invest (partly or wholly) in equities and other volatile assets; for these investors, the unhedged risk must and will pass directly through to the amount that can be spent on consumption as the ARVA is recalculated each period.

In our view, the discussion should not be about whether 3% or 4% is correct, nor should it be about whether to tolerate a 10% or 20% possibility of failure in a simulation (any possibility of failure being unacceptable). Rather, it should be acknowledged that with risky investments, there is risk to one’s wealth, and in the presence of such risk, there cannot be a fixed spending rate. So, the discussion should be about how to recalculate the proper level of spending each year as one’s portfolio value and time horizon evolve. (Yes, excellent)

Others may calculate probabilities of failure, but we are not interested in failure. Running out of money before running out of life is a catastrophe, mitigated only by Social Security. It is not something we want an investor to do, even with a low probability. We want an approach that guarantees a wealthappropriate income right down to the last payment, not one that settles for some small but still very significant probability that such an outcome will not be achieved. This must be the starting point for any discussion of this topic. (Excellent)

A single generalized spending rule meets the needs of both the riskless and the risky investors: Spending in the current period should not exceed the payout that would have occurred in the same period if the investor had purchased with his or her available assets at the beginning of the period a fairly priced level-payment real fixed-term annuity with a term equal to the investor’s consumption horizon

The ARVA strategy has the advantage of connecting the dots between risk and return in the most meaningful possible way: Investment risk translates directly into consumption risk. More equities and other risky assets and less hedging of consumption mean more volatility—uncertainty—of consumption. Living standards will go up and down unpredictably to the extent of the unhedged risk in the portfolio

risk—the only risk—you care about when setting your investment policy. And it is controlled by the volatility of the portfolio chosen in the asset allocation process: The standard deviation of the portfolio’s investment strategy is also the standard deviation of consumption (for a constant discount rate). Hold that risk tolerance thought; you will use it repeatedly when considering spending rules and investment policies. As a result, in considering the degree of aggressiveness in risky asset holdings—that is, where to be on the surplus efficient frontier as described in Sharpe (1990) or, with a more specific link to multiperiod consumption, in Waring and Whitney (2009)—risk tolerance for the investment portfolio is equivalent to risk tolerance for spending volatility. Here is the deal: if you cannot take large hits to spending several years in a row, perhaps you should be considering a more closely consumption-hedged investment policy, with fewer nonhedged risky assets. Many people are probably invested more aggressively for their retirement than they might be if they thought this risk tolerance issue through. Some investors may not like experiencing consumption volatility. Many would like to have their aggressive risky asset portfolio “cake” and eat it smoothly too, as the old saying (almost) goes, holding lots of equities and other risky assets. But—this is a reality check—the “tough love” lesson of this article is worth repeating: consumption volatility directly follows from investment and discount rate volatility and is what risk is. Embrace it; remember it. Manage it with your investment policy; do not take risk the downside of which would make you unhappy

If one believes that the random walk model is a reasonably good model of the markets, the possibilities of ruinous long-term underperformance cannot be ignored.

What happens if your luck is bad? We alluded to it earlier, in our discussion of what risk is. As a result of our investor’s reaching for his aspiration by taking on greater risk, the assets might earn less than the risk-free return, and if they do, consumption will be lower than what he could have had risklessly with a ladder of TIPS worth his actual asset value— $600,000! Lower, not higher—completely defeating the aspirational effort—and perhaps much lower. Aggressive investment strategies that aim to increase spending beyond an investor’s apparent means generate a significant probability that the investor will be worse off, not better off. You can count on what you have (if invested correctly), but aspiring to do better by taking on additional investment risk may or may not end well.

The more interesting situation is when the investments include risky assets and are imperfectly hedged to consumption. If the investments involve risk, the recalculated annuity periodically adjusts spending to keep it appropriate to fluctuating portfolio values and interest rate levels; in this way, spending will always be sized appropriately to one’s assets and the possibility of ruin can be avoided.

Risk tolerance must be set carefully when deciding the aggressiveness of the asset allocation or investment strategy. Risk in the investment portfolio translates directly into risk in the investor’s lifetime consumption stream: a 10% portfolio loss requires a 10% reduction in spending. It should be no surprise to anyone that the decision to seek higher expected returns in an effort to increase consumption means taking on greater expected risk—risk that realized returns, and thus consumption, might end up lower rather than higher.

EFM- As stated these are just excerpts and I surmise you know what my comment is. The whole idea of risk is to control it. DCAD does exactly that but whatever the simplicity is, it is apparently beyond academia and all the supposed thought leaders. Do you see what the bold print says directly above? Think about the losses sustained in 2000 and 2008 and then tell me someone could accept a 44% reduction in assets for 2000 and corresponding income and then a 57% drop a few years later? But it's even worse than that as I have indicated in previous commentary. A retiree taking out funds will never see the complete return of assets. The authors note- "if you cannot take large hits to spending several years in a row, perhaps you shouldbe considering a more closely consumption-hedged investment policy, with fewer nonhedged riskyassets"- and I submit that is most of the middle income, then DCAD should be a major offset to such risky assets and allow greater income overall. Instead of a 44% loss, it could be 10%. Instead of a 57% loss, it could be 13%. No algorithms- just common sense. And DCAup provides an independent way to get back in.  Also recognize that the emotional stability of the family will be FAR better.

The authors however have a similar philosophy of doing an examination of the then budget and investments every year. This essentially precludes the innumerable articles preaching a 4% or 3.5% or 3% annualized income "good" for a 30 year or more lifetime.  

Their commentary on a very long lifetime was excellent. Not really sure how it could be handled for a very large populace.

3/1: I must hurry- this from an email just received.

I'd like to see you as a guest in Lake Tahoe, May 28-31, for our "Annual Premier Coaching Event".

Qualification only takes 3M production, and we've made it easier for you to qualify.

We are giving you double the points in March!

Would this be an incentive to agents to "get on board"? You decide
(Did it take long?)


Long-term Care Insurance

new study led by senior economist Anthony Webb of the Center for Retirement Research, finds that U.S. nursing home stays are relatively short: 11 months for the typical single man and 17 months for a single woman.  There’s some unpleasant news in the study, too, because the risk that an older person may one day need nursing home care is 44 percent for men and 58 percent for women.

For the last couple weeks I have read more LTC articles. They almost universally talk about nursing home care as being LTC. No. Effectively the journalists say something like above that the nursing home stays are relatively short. Did they mean just nursing home exclusively or was it assisted living AND nursing home?

So I have no idea what the statistics actually are. See if you can figure it out. 

more than half of women die before age 85 (80 for men)

3/1; Crap

Best Practices for Gauging and Managing Your Clients’ Risk Tolerance

Effective and meaningful conversations about risk are critical to relationship success, says Dr. James Grubman, a wealth psychologist who works with high-net-worth families and their advisors. Yet, for many advisors, talking about risk is right at the top of the “sensitive topics” list. Why? Because whether or not your clients admit it, their own feelings about risk are a reflection of their upbringing, personality, emotional security and experiences with money, regardless of how wealthy they may be.1  As an advisor, it’s clear that in the current landscape, it’s risky to rely upon untested assumptions about your clients’ attitudes toward risk. In light of the events over the past few years, advisors should consider re-assessing each client’s risk profile by encouraging clients to spend time discussing their attitudes toward risk. This will allow you to be successful in the analysis and calculation of your clients’ risk attributes. RAISING THE SUBJECT OF RISK: A CRUCIAL CONVERSATION2 Most financial advisors assess risk as a normal part of the client relationship. Your biggest challenge, however, is getting an accurate picture of your client’s risk tolerance3. For most people, ‘risk’ only means loss, damage and putting something in danger, says Grubman. “When you start a conversation with, ‘Let’s talk about risk,’ you are likely making your clients anxious from the start.” Using the word ‘risk’ right off the bat may create emotional roadblocks that prevent you from having a more productive and rational discussion4. For other clients, the concept of risk is so abstract that it may be difficult for both advisors and clients to articulate their thoughts in mutually comprehensible terms. Given the loaded nature of the word, especially within the construct of a financial relationship, Grubman advocates using real-world situations and experiences that will be more effective in probing and pinpointing your clients’ feelings about risk. Consider the following conversation starters: – “Let’s talk about those times in the market when you tend to get nervous.” – “What helps you sleep well at night when it comes to your money?” – “You have $100,000 in your portfolio today. How would you handle a scenario in which the value of your portfolio dropped to $80,000 over a three-month period?5” These kinds of open-ended questions will elicit emotional responses that will cue you in to how much risk your clients can actually manage. Grubman also points out that most clients only focus on the negative connotations of risk, without considering its benefits as a means of potentially capturing excess returns in strong markets or protecting against the potential erosion of the value of a portfolio during inflationary periods6

Attitude Towards Risk Risk equals danger to these investors, who have little confidence in their ability to make good financial decisions.
Risk equals danger or uncertainty; investors in this group adapt to poor decisions uneasily.
Risk relates to uncertainty, yet they are prepared to take a small to medium degree of risk in their investments. They are usually confident in their decisions.
Risk represents uncertainty to these investors. They have a reasonable amount of confidence in their ability to make good financial decisions.
Risk equals opportunity and a medium degree of risk is acceptable. They have a reasonable amount of confidence in their ability to make good financial decisions.

Risk equates to opportunity, a large degree of risk is acceptable. They have a great deal of confidence in their ability to make good financial decisions. These investors think of risk as an opportunity or thrill, and they have complete confidence in their ability to make good financial decisions.

Financial Profile Always more concerned with possible losses than possible gains. More concerned with possible losses than possible gains. Still usually more concerned with possible losses than possible gains. More concerned with possible gains than losses. Always more concerned with possible gains than possible losses.

1: They have put risk in a subjective position. Why not make it objective by showing what the risk actually is BY THE NUMBERS. Ever hear of Risk of Loss? You can define the risk for almost any portfolio.

2. The level of risk is one of the first issues of discussion- before any investments are made.

3. Getting a picture? Just show the numbers.

4. Change the focus to risk of loss and what do they want to do? Try a buy and hold and probably get slaughtered or limit losses to 10% to 15%.

5. That's 20% which is beyond the values I set for DCAD. DCAD would have already 'forced' sale of the equities. The question is why did it drop? Is it just a correction? 

6. DCAup 'forces' one to buy in on the upside. Might be able to do it before an announcement by the National Bureau of Econom6ic Research but this is independent.

If you have an advisor bent on the status quo, the risk conversation is a guide to disaster if a bad time occurs. And only a large mosquito bite with DCAD.




23/1: Interesting

Why Financial Advisers Should Factor Tech Advances in Retirement Planning
"In the next stage of our [65-year-old] client's life, from 80 to 85, robots will be able to help him with the activities of daily living, for about 15% less than the current cost of a home-health service. By the time this client is 85, robots will not only be cheaper but more capable, and the savings will continue to increase. These future savings, and clients' increasing life expectancy, need to be factored into plans we're making today. Planners may want to set aside money for emerging technologies, and make calculations based on longer life expectancies."
(The Wall Street Journal; subscription may be required)  

3/1: Side by side with the limitless possibilities opened up by the new technologies, reflection about international order must include the internal dangers of societies driven by mass consensus, deprived of the context and foresight needed on terms compatible with their historical character. As diplomacy is transformed into gestures geared toward passions, the search for equilibrium risks giving way to a testing of limits. … 

Because information is so accessible and communication instantaneous, there is a diminution of focus on its significance, or even on the definition of what is significant. This dynamic may encourage policymakers to wait for an issue to arise rather than anticipate it, and to regard moments of decision as a series of isolated events rather than part of a historical continuum. When this happens, manipulation of information replaces reflection as the principal policy tool. 

– Henry Kissinger, “World Order: Reflections on the Character of Nations and the Course of History” (2014)

3/1: Fiduciary Push Expected after State of the Union Address
"The administration is already prepared to defend the Department of Labor rule with an economic justification document that is seen as a key to getting a court to uphold the regulation if it is finalized but then challenged in court. The economic justification document ... purports to show that consumer protections for investment advice to the retail and small plan markets are inadequate and that the current regulatory environment 'creates perverse incentives that ultimately cost savers billions of dollars a year.' The justification document said evidence through various studies indicates these costs arise from incentives to steer savers into higher cost products within the IRA market."

3/1: One in Five Investors Have Tapped Into 401(k) Prematurely
"The majority of nonretired investors in the U.S. say their employer offers a 401(k) plan, and of these, 89% say they participate in it. Yet 21% of those who participate in such a plan say they have either taken out a 401(k) loan or even taken an early withdrawal from the plan in the last five years."


Caregivers Encourage, Motivate Loved Ones with Aphasia
By Joanne Marttila Pierson, Ph.D.


  • You ask your spouse for a plate, and he hands you a cup.

  • Your spouse seems to get “stuck” on the same word or phrase.

  • Your spouse can say words, but her sentences don’t make sense.

That’s Aphasia: a language disorder that results from damage to parts of the brain. It can affect all modes of language including speaking, writing, gesturing, understanding what others say, understanding writing, and using numbers. Aphasia often hides people’s thoughts, ideas, personality, intelligence and competence – they know what they want to say, but can’t always get the words out.

Stroke is the leading cause of aphasia; however, it also can result from brain tumors, head injuries, brain infections, and other conditions of the brain.

People who suffer from aphasia can have difficulty understanding others, particularly strangers. Or, they can follow the gist of a conversation, but lose track easily, or forget the beginning of a message before reaching the end of it. They may be able to say individual words, or parts of words, but struggle to complete the entire word or sentence. Or, they may speak nonsense quickly. And background noise or lively conversation among a group of people can really exacerbate the difficulty they have understanding conversations.

“Many times, too, a person with aphasia is so focused on themselves, they are unable to see that their caregiver is overwhelmed. The person with aphasia can’t help it; they’ve lost a lot of control in their lives between the loss of communication and physical disabilities. They are just trying to survive,” says Mimi Block, M.S., CCC-SLP, clinical services manager, University of Michigan Aphasia Program.

“And even if they could recognize how much their caregiver is dealing with, they cannot express their gratitude or appreciation,” she added.

It can be an enormously frustrating condition, for both the individual and the caregiver.

The University of Michigan Aphasia Program (UMAP) is the oldest and most effective program of its kind in North America for the treatment of aphasia. Established in 1947 to assist World War II veterans who sustained injuries in combat, UMAP has successfully treated thousands of individuals, offering as much speech-language therapy during a six-week session as a person would receive in one year of traditional therapy.

Caregiver education and support is a critical component of the UMAP.

This past summer, UMAP gave Robin Cox, wife of a (retired) National Guard Lieutenant Colonel with aphasia, the tools to help her husband with his therapy and the insight to help herself as his caregiver. Her husband Mark suffered a stroke in March 2009, just 30 days before he was due to be deployed to Afghanistan.

“I know it’s a cliché, but UMAP taught me this is not the end of the world, there is light at the end of the tunnel, and the little progress we make each day brings us that much closer to our goals,” Robin Cox said. “And those little improvements are exponentially more important for the caregiver,” she added. “They bring us ten times the joy.”

One morning, not too long ago, Mark found his glasses after looking for them for quite some time.

“He said, ‘I found them’ and I said, ‘Say that again!’ and he did! And then I made him say it again. It was one whole, complete sentence. It’s those little moments you must celebrate,” Cox said.

During the six-week session at UMAP, there are five caregiver meetings which focus on:

  • Acquiring a better understanding of aphasia, and the physical disabilities associated with a stroke (the most common cause of aphasia)
  • Facilitative conversation and other ways to communicate with people who have aphasia
  • Effective communication techniques and strategies
  • Practicing new communication skills using facilitative conversation
  • Options for the future

“Ongoing education is essential for the well-being of the loved one with aphasia and all the family members,” Block says. “The caregiver needs to connect with the speech-language pathologist who sees their loved one to learn about aphasia and specific techniques to communicate with him or her.”

To prompt conversation, Block encourages caregivers to use “topic cards,” which are lists of words or pictures—like family, sports, friends, birthdates, hobbies, maps, a calendar—as a starting point to determine what the person wants to talk about.

“There’s also the WH Chart—who, what, when, where and why, that can be used to get the person thinking in terms of sentence structure,” Block said. “The more information that’s available to them, the more successful they will be.”

One night when Mark Cox was trying to tell his wife Robin to change his schedule that week, she said they both “went round and round and round, and started to get flustered” until she resorted to using a calendar and writing down days of the week and appointments to clarify what her husband was trying to do.

“You have to keep digging to find the right way to get the point across,” Robin Cox says. “It’s more than just talking. You can use pictures, calendars or write words on paper. You’ve got to take a deep breath and be patient. Yelling isn’t going to do it. You have to try all of your options.”

UMAP also encourages caregivers to be advocates for their loved ones, providing them with the encouragement and motivation to continue on the road of recovery with realistic goals and expectations, and a better ability to communicate in their day-to-day living.

Lulu Smith, whose husband Louis suffered a stroke in 2005 and has aphasia, is in two therapy programs, including UMAP. She accompanies Louis to all of his therapy sessions, and either watches them or participates in them directly.

“I watch to see what the therapists are doing, and I insert their techniques into our daily routine at home,” she said.

Lulu Smith also tries to keep their lives as normal as possible. Louis is a legendary jazz trumpeter with an international reputation and many major recordings, and she regularly takes him to jazz festivals and clubs where he can interact with other musicians. They’ve always been great travelers, she said, and they go to Paris in October each year and to Mexico for two months in the winter.

“I never get someone to ‘sit’ with him. We’ve always done things together,” she said.

Robin Cox recently encouraged her husband to go with her to their 11-year-old son’s football game.

“He didn’t want to go at first. Since he had his stroke, he’s lost some endurance, too. But he ended up staying for the whole game. I think Mark realized he can socialize, and he can talk with others—not just his wife, his brothers, or people who are close to him. Physically, he was tired, but it was great for his spirit.

“He was put out of his comfort zone. I think that’s what a caregiver does. We try this, and if it doesn’t work, we’ll try something else,” Cox said.

“It is so important to keep trying,” says Joyce Zeigler, whose husband Mack suffered a stroke in 2004 and who has participated in two UMAP sessions in 2006 and 2008.

“Mack continues to make progress. I encourage people with aphasia and their loved ones to be patient and have hope. Mack and I have faith that more progress is in his future. We take it a day at a time and look forward to each day.”

Lulu Smith adds, “You must understand it takes a long time to have success. You have to keep working and working, and never give up. You’ve got to stick with it.”

2/26: The remote Alaskan village that needs to be relocated due to climate change 

The article is obviously about climate change but my focus is on the millions that the government may have to/will spend to move this town of 400.  As soon as that happens, the flood gates for assistance to U.S. shores will open- large communities all wanting billions to protect their shores.

And do not forget what everyone knew about New Orleans even before the hurricane hit. It was sinking anyway and it would be only a relatively short period of time before sections would be uninhabitable without billions in new dike construction. Do we keep on bailing out areas that are below the ocean? That's New Jersey. What about North Carolina?
Add that to the billions needed for Alzheimers. Our schools are doing a poor job with education. and the list is endless................................

My sister was strange

2/26: What is Age-Related Macular Degeneration (AMD)?

Macular degeneration is an eye condition that attacks the macula, the region of the retina responsible for central, detailed vision. Although it does not cause complete blindness, it robs the individual of their central, straight-ahead vision, resulting in what is often referred to as a central vision “blind spot”. It does not affect the outer circle of peripheral vision, so a person will always be able to see things to the side, but this vision is too low resolution (blurry) to make up for lost central vision.

For many people, the first sign of AMD is something they notice themselves. Straight lines like doorways or telephone wires may appear wavy or disconnected. When they look at a person, their face may be blurred while the rest of them are in focus. Lines of print may be blurred in the center or the lines may be crooked.

What is End-Stage (or Advanced) AMD?

  • More than 15 million Americans are affected by some form of macular degeneration, a progressive disease which can lead to severe vision loss in the most advanced form, end-stage AMD. Approximately 2 million Americans have advanced forms of AMD with associated vision loss. 
  • End-stage macular degeneration is the most advanced form of age-related macular degeneration and the leading cause of irreversible vision loss and legal blindness in individuals over the age of 60. 
  • Despite the availability of new drug treatments that slow, but not stop, the progression of AMD, the number of people with end-stage AMD is expected to double by the year 2050.

How is AMD Diagnosed?
As the National Eye Institute explains, the early and intermediate stages of AMD usually start without symptoms. Only a comprehensive dilated eye exam can detect AMD. The eye exam may include the following:

  • Visual acuity test. 
    This eye chart measures how well you see at distances.
  • Dilated eye exam. 
    This provides a better view of the back of your eye. 
  • Amsler grid test. 
    This checks whether you are seeing unusual wavy lines.
  • Fluorescein angiogram. 
    This test makes it possible to see leaking blood vessels, which occur in a severe, rapidly progressive type of AMD. 
  • Optical coherence tomography. 
    Like an ultrasound, OCT can achieve very high-resolution images of any tissues that can be penetrated by light—such as the eyes.

During the exam, your doctor is looking for drusen, which are yellow deposits beneath the retina. Most people develop some very small drusen as a normal part of aging. The presence of medium-to-large drusen may indicate that you have AMD. Another sign of AMD is the appearance of pigmentary changes under the retina.

What are Wet AMD and Dry AMD?
Dry AMD, also called atrophic AMD, is the most common form of age-related macular degeneration. Macular Degeneration Partnership explains that it occurs when the there is a “breakdown or thinning of the layer of pigment epithelial cells (RPE) in the macula. These RPE cells support the light sensitive photoreceptor cells that are so critical to vision.” As these cells die and drusen (a yellow deposit) build up as a result, the macula is damaged, reducing central vision.

Wet AMD, also called neovascular AMD, is only diagnosed in about 10 percent of patients, according to the National Institutes of Health. Vision loss associated with wet AMD occurs when abnormal or very fragile blood vessels grow under the macular and then leak blood and fluid. This damages the macula. Typically, patients who develop wet AMD often are diagnosed with dry AMD, first.

How is AMD Treated?
Early AMD – Currently, there is no treatment, but it should be monitored annually by an ophthalmologist (eye doctor).

There are many service providers who can educate AMD patients and their caregivers about vision assistive devices such as reading glasses with high-powered lenses, video magnifiers, computer aids and many more. Ask your physician for a referral to a low vision occupational therapist.

Intermediate AMD – There are several treatments that may slow progression, but will not cure AMD.

  • Vitamin therapy (AREDS2 formulation)
  • Anti-VEGF injection - A few different anti-VEGF drugs are available (e.g., Lucentis) and vary in cost and how they are injected. 
  • Photodynamic therapy - This technique involves laser treatment of select areas of the retina.
  • Laser surgery – Used with only certain cases of neovascular (wet) AMD, it involves aiming an intense “hot” laser at the abnormal blood vessels in your eyes to destroy them.

End-Stage (Advanced AMD): The CentraSight treatment program uses a tiny telescope, an FDA-approved medical device, which is implanted inside the eye to improve vision and quality of life for individuals affected by End-Stage AMD. It is the only surgical treatment option for AMD. 

It is also a Medicare eligible, out-patient procedure. Learn more by calling 877-99-SIGHT (74448) or at

The telescope implant is not a cure for End-Stage AMD. It will not restore your vision to the level it was before you had AMD, and it will not completely correct your vision loss. Patients with this level of AMD have had to cease driving due to their vision; after the telescope procedure, although near and distance vision may improve, driving will not be possible because the implant does not restore normal vision.

How is AMD Prevented?
Common risk factors for AMD are:

  • Smoking. 
    Research shows that smoking doubles the risk of AMD.
  • Race. 
    AMD is more common among Caucasians than among African-Americans or Hispanics/Latinos.
  • Family history. 
    People with a family history of AMD are at higher risk.

To reduce your risk, avoid smoking, exercise regularly, maintain normal blood pressure and cholesterol levels and eat a healthy diet with green leafy vegetables and fish.

2/25: Gack!

 24 percent of Americans have more credit card debt than emergency savings, and 13 percent are not much better off—they don't have credit card debt but they don't have emergency savings either. Put another way, more than a third of Americans are living at risk of a financial crisis.

  1. Stock Market Volatility and Learning




Adam, Klaus (University of Mannheim) ; Marcet, Albert (Institute d'Analisi Economica) ; Nicolini, Juan Pablo (Federal Reserve Bank of Minneapolis)

Consumption-based asset pricing models with time-separable preferences can generate realistic amounts of stock price volatility if one allows for small deviations from rational expectations. We consider rational investors who entertain subjective prior beliefs about price behavior that are not equal but close to rational expectations. Optimal behavior then dictates that investors learn about price behavior from past price observations. We show that this imparts momentum and mean reversion into the equilibrium behavior of the price-dividend ratio, similar to what can be observed in the data. When estimating the model on U.S. stock price data using the method of simulated moments, we find that it can quantitatively account for the observed volatility of returns, the volatility and persistence of the price-dividend ratio, and t he predictability of long-horizon returns. For reasonable degrees of risk aversion, the model generates up to one-half of the equity premium observed in the data. It also passes a formal statistical test for the overall goodness of fit, provided one excludes the equity premium from the set of moments to be matched.


5 Wheelchair Van Shopping Tips for Caregivers
By Susan Hawkins

If you’re the caregiver for an individual who uses a wheelchair, owning a wheelchair accessible van is helpful and can be more affordable with these tips.

Family Caregiver
As the caregiver for a family member, you can choose a wheelchair van based on the needs of the person in your care. Wheelchair vans come with rear entry access or side entry access, and one can sometimes work better than the other in certain situations.

The family caregiver, as the driver of the van, can consider both styles. Side entry access means the van’s ramp deploys from one of the side-door openings. The wheelchair user can sit in the middle of the cabin just behind the front seats or in the front-passenger position when the adapted minivan has a removable front seat. The removable seat lets you to carry up to two wheelchair users at the same time. Jump seats can be added for extra seating for non-wheelchair users.

If the person uses an extra-large or extra-tall power chair, rear entry access may be the best choice. The rear door-opening width and height are larger, and the ramp is wider, too. The rear entry conversion usually features a manually operated ramp, but a power ramp can be added for an extra charge.

Professional Caregiver
Having a wheelchair van is a unique selling point for many self-employed caregivers and caregiving companies. Whether it’s taking a patient to a doctor’s appointment or providing the patient with a change of scenery, a wheelchair accessible vehicle can make a big difference.

Your patients will have different mobility devices, including power chairs and mobility scooters, so your best choice is a minivan adapted for rear entry access.
A rear entry van also has seating if a patient’s family member or two comes along.

A long-channel rear entry conversion can handle up to two passengers in wheelchairs at the same time. If you’re a self-employed caregiver or caregiving company, you’ll have a well-equipped vehicle that can be a rolling advertisement for your business.

General Shopping Tips

Tip #1: Shop around. 
Check out wheelchair van dealerships online and nearby to see what they have in your price range. There are also mobility classifieds online, where individuals list only wheelchair-accessible vehicles for sale.

Tip #2: Determine your budget. 
Budget is almost always a top concern for family and professional caregivers.
Today’s handicap accessible van market has three clear price levels that represent the three base van/conversion possibilities.

  • A New Van with a Brand-New Conversion. Shoppers usually pay the highest prices for a brand-new minivan equipped with a brand-new conversion.
  • A Used Van with a Brand-New Conversion. Some conversion companies buy used minivans with newer model years and low mileage, which they convert for wheelchair use. That means you can save money when you buy a used van with a brand-new conversion. You’ll find high-quality conversions in a wide range of prices.
  • A Used Van with a Used Conversion. Last, and almost always least—though only in cost—are used minivans with used accessible conversions. Online and local dealerships usually have a number of used/used accessible vehicles on hand, because their owners trade them in or sell them to upgrade to a newer model van. You can find some great deals when you buy used/used. 

If you’re on a budget, look for certified-used wheelchair vans with reasonable prices, and don’t forget to negotiate.

Tip #3: Understand kneeling systems. 
Many vans with wheelchair accessibility have a kneeling system. The vehicle “kneels” closer to the ground to lessen the incline. That makes entry and exit easier for the independent, manual wheelchair user. These systems can be pricey, unreliable, and unnecessary for caregivers.

Tip #4: Be Prepared with Questions for the Mobility Consultant. 
Mobility consultants, online or local, should give you this information, but if not, you should be aware of the following information before you buy:

  • What warranties do you offer? Warranties vary based on the base vehicle and conversion manufacturer. Brand-new minivans are always equipped with brand-new conversions, and you should have warranties on both. Used wheelchair vans for sale may have either a new or used conversion. A new conversion should come with a satisfactory warranty, and, if there’s time remaining on the base vehicle’s original warranty, you’ll have that, too.
  • Do you deliver? If you buy from a local dealer, pick-up may be your only choice. For caregivers who buy a handicap accessible van online, delivery options are a must. Ask about the company’s different delivery choices and charges.
  • What services do you provide after the sale? Every customer should receive a detailed demonstration of the adapted van and all its features at delivery or pick-up. Nationwide conversion service is important, because you might be in a remote location when service is needed. Ask about a toll-free, 24-hour Conversion Emergency Help Line, so you’re protected nationwide. Some dealers have a Buy Back Program, which is a stress-free way to sell your wheelchair van. 

Tip #5: Read Company Reviews and Testimonials Before You Buy. 
The most reliable online and local wheelchair van dealerships appear on review sites like Yelp and Google Local. Company web sites should feature customer testimonials.

When you shop for a wheelchair van, keep these tips in mind to make sure you get the best van for your needs at the best possible price.

2/24: Life settlements
  1. 65+ years and older who in your estimation have a 15 year +/- life expectancy
  2. Annual level premiums of 5% of the face amount or less until maturity (Premium Ratio)
  3. Policy face amount of $100,000 or greater

"90% of seniors who lapsed a life insurance policy would have considered a life settlement had they been aware of the possibility." Insurance Studies Institute

  1. The curse of knowledge increases self-selection into competition: Experimental evidence




Danz, David

The psychology literature provides ample evidence that people have difficulties taking the perspective of less informed others. This paper presents a controlled experiment showing that this "curse of knowledge" can cause comparative overconfidence and overentry into competition. In a broader context, the results provide an explanation for the overconfidence of nascent entrepreneurs and the substantial rate of failure among new businesses.

  1. Teams Contribute More and Punish Less




Thum, Marcel ; Auerswald, Heike ; Schmidt, Carsten ; Torsvik, Gaute

Many decisions in politics and business are made by teams rather than by single individuals. In contrast, economic models typically assume an individual rational decision maker. A rapidly growing body of (experimental) literature investigates team decisions in different settings. We study team decisions in a public goods contribution game with a costly punishment option and compare it to the behavior of individuals in a laboratory experiment. We also consider different team decision-making rules (unanimity, majority). We find that teams contribute significantly more and punish less than individuals, regardless of the team decision rule. Overall, teams yield higher payoffs than individuals.

2/24: ETFs

•    Assets in US listed ETFs at the end of January 2015 dropped to $1.94 trillion from a record $2.14 billion at the end of December 2014 due to a downtrend in the US equity markets and negative cash flows.

•    The US market now has over 60 ETF issuers with over 1,400 listed ETFs.

•    There were $3.8 billion in negative cash flows out of ETFs in January 2014.  This was a big fallback after record monthly inflows of $53 billion in December of 2014 which led to annual record inflows of over $240 million for all of 2014.

•    US equity ETFs had over $22 billion in net outflows in January led by the SPDR S&P 500 ETF which had $28 billion in outflows for the month. I believe this is a continuation of a long term trend of outflows in January of each year.  This occurs because many professional managers sell stock positions in December to take tax losses and use large Cap focused ETFs to maintain market exposure until they can buy the stocks back 30 days later and thus avoid "was sale" rules which would prohibit taking losses.

•    ETFs investing in US fixed income continued to gain assets and were the leading segment in January with $7.8 billion in new cash flows.

•    This was followed by ETFs investing in International Equities and Commodities which took in $6.2 and $3.1 billion respectively.

•    The leading ETF for new cash inflows in January was the WisdomTree Europe Hedged Equity which gives equity exposure while protecting against a weakening Euro. This ETF took in $2.9 billion for the month and now has over $9 billion in total assets.

•    The second leading cash inflows went to the SPDR gold which took in $1.9 billion as gold prices rose almost 9% for the month.

•    The top ten asset gainers with positive new cash flows for January 2015 include: WisdomTree Europe Hedged Equity ($2.9 billion); SPDR Gold ($1.9 billion); Vanguard S&P 500 ($1.7 billion); Vanguard Total Stock  Market ($1.5 billion);  Deutsche X-trackers MSCI EAFE Hedged Equity ETF ($1.2 billion); United States Oil ($1.2 billion); Health Care Select SPDR ($0.9 billion); WisdomTree Japan Hedged Equity ($0.9 billion); iShares iBoxx $ High Yield Corporate Bond ($0.9 billion) and Market Vectors Gold Miners($0.8 billion).

•    The positive cash flows in January show interest in US dollar developed market plays and commodities

•    The top ten asset losers with negative new cash outflows for January 2015 include: SPDR S&P 500 ($28.0 billion); PowerShares QQQ ($3.2 billion); Financial Select SPDR ($2.1 billion); iShares Russell 2000 ($1.7  billion);  iShares MSCI Japan ($1.3 billion); iShares MSCI ACWI ($1.0 billion); iShares MSCI Emerging Markets ($1.0 billion); SPDR Dow Jones Industrial Average Trust ($0.8 billion); Industrial Select SPDR ($0.7 billion) and SPDR S&P Regional Banking ($1.3 billion).

•    The negative cash flows in January 2015 do not show any major themes other than the likely reversal of large cap equity ETF positions used to keep market exposure while undertaking tax swap strategies.

•    Investors continue to embrace ETFs as an efficient means of gaining exposure to alternative assets.

•    Hedge Fund ETFs from IndexIQ are now available that seek to provide the diversification benefits of hedge funds without their structural impediments, namely lack of liquidity and transparency and high fees.

2/24: 205 ways to save money

I don't agree with a few but there is bound to be something that is worthwhile

The Arithmetic of Active Management By: William F. Sharpe