IFO is not fond of the radio financial advisers. They keep talking about hopes and dreams, risk tolerance, and how incredibly complex and risky investing is. They hint that individual investors can encounter disaster.
This morning, one of them talked about mutual funds, which as you know, are a way to reduce risk. Oh, yeah? The radio advisor talked about mutual funds which had had two-digit returns (10% and up), but had in the following year dropped in price by 40% to 60%. Excuse me?
You could do that yourself and not have to pay advisors and mutual fund management fees!
However, he partially redeemed himself with his description of retirement as having three stages: go-go (vacation! move to new home!), slo-go (settle down and relax), and no-go (nursing home, then cemetery). Of course, he was more delicate about the last stage.
IFO has seen a similar take on senior-hood: young old, old, old-old. Same, same. A Google search reveals eight articles and posts on the three stages, so we won’t even provide links. This is old news.
However, here’s a FOUR STAGES take – University of Nebraska’s Kathy Prochaska-Cue, Extension Service Economist, provides a glaringly obvious and detailed description of planning for retirement that is enough to convince you to NEVER retire! It’s too darn much work!
Her Fourth Stage is the first: Transition, then active, passive and final. Sounds dismal, eh? Also, somewhat academic – active and passive verbs, final exams. Wonder how old this expert is? Feel free to peruse, especially if you are an insomniac, but don’t like to take pills for it.
Still, keep these stages in mind as you review your portfolio. You do review it yourself, regularly, do you not? Good.