Core Investment Management Group, LLC

Retirement Savings Shortfall Gerald House MSM Researchers continue to analyze the methods and procedures for calculating the ideal savings and investment rates needed for individuals without considering that life happens .  There are events and circumstances in our lives which determine our financial savings and accumulations once retirement approaches.  Therefore, more theories and assumptions are not going to change the fact most Americans are not financially prepared for retirement.  Pang, Gaobo, and Schieber (2014) discuss the numerous studies aimed at discovering the right mix of retirement withdrawal rates and portfolio allocation strategies.  One item which the authors discuss is the disproportionate allocations without considering the pre-retirement income of the individual.  Also, according to the authors, the life cycle accumulation models do not consider life events throughout the savers working life which may severely impact their savings ra...

The Yale Endowment Model         The Yale endowment model incorporates the mean-variance approach as described in Modern Portfolio Theory (MPT) designed by Harry Markowitz and James Tobin ( Yale Investment Office, 2017).  Markowitz (1952) based his theory on the idea of minimizing investment risks within the investment portfolio by enhancing diversification strategies designed to optimize an investment portfolio given any level of risk. The Yale Endowment Model, using this method, has changed its mix of investments from nine-tenths in stocks, bonds, and cash to just one-tenth in recent years.  Currently, the Yale Endowment model uses an alternative investment mix for the bulk of their investments to include private equity, real estate, leveraged buyouts, venture capital, absolute returns, foreign equity, domestic equity, fixed income, and cash and it’s equivalent.  Endowment models in general usually have a long-term investment horizon, but t...

Stock (Equity) and Bond (Debt) Replacements            Financial advisors and investment managers should consider absolute returns in all market conditions, not just traditional asset classes when building an investment portfolio for a client.   Investment strategies necessitate the need to look outside the traditional stock and bond portfolios of  yesteryears and include assets which are viable replacement vehicles (Alternatives) such as  Crowdfunding (CF) and Peer-to-Peer lending (P2P).  The DNA of an investment portfolio cannot  afford to limp around after a stock market correction because of the confinement of products to a  single mindset of correlated investments in one area of investing.  Background    Crowdfunding (CF), like Peer-to-Peer lending (P2P) is a method to raise funds or capital for various projects, like start-up businesses or real estate investment...

*The Living Balance Sheet How accurate is financial forecasting?  Many financial planners use both a past and future forecasting to design a financial plan for clients.  As a matter of fact, Monte Carlo simulations (computerized simulations designed to model various outcomes and risks) are run to supposedly add credibility to the financial plan outcome.  However, why do you need to forecast future results which may or may not happen?  Perhaps this allows people to sleep better at night?  Life happens.  Therefore, why not just keep a personal balance sheet which is easily updated automatically from your existing checking and investment accounts?  These online accounts are very secure and can chart your progress 24 hours a day.  I use Mint (A Quicken Product) which recently was voted best personal financial service software by PC Magazine for 2017—and it is free.  Sure, it takes some time to get all your accounts set up but you will soon...

Is 70 the New Retirement Age? While most people still consider age 65 to be the standard retirement age, realistic experiences from the baby-boomers suggest delaying retirement to age 70 is more practical for most people.  If you consider the facts related to retirement, delaying retirement until age 70 only makes sense.  First, people are living longer and the delay keeps you active longer and ensures you might have enough money to sustain yourself financially for the long haul because you can delay receiving your Social Security income, which will increase the monthly benefit payout by approximately 8% each year you delay receiving it, and you can work longer to build your nest egg.  A look at the evidence to support delaying retirement age may convince you.  Stock values in 2016 were almost three times more expensive, per dollar business profit, than they were in 1980 (Blanchett, Finke, and Pfau, 2017).  The expensive stock value, coupled with a low-inte...

Men sit up and take notice--women have more money and are better investors than you! The financial service industry is currently evolving and changing with the economic and technological advancements permeating our culture.  We are witnessing changes in the financial industry both in the United States and in other countries.  Still, a male-dominated industry, we may see a plethora of changes in the near future with more female financial advisors entering this lucrative career choice.  Nonetheless, there are a few changes happening today which will have a profound effect on individual retirement assets in the future.  First and foremost, women currently control over 50% of the personal wealth and will inherit over 70% of the assets of the baby-boomer generation (Fitzpatrick, Reichmeier, and Dowell 2017).  Men, if you think women are only after your money--it is too late--they already have it.  Actually, men can assume credit for the meager retirement as...

Alternative Investments:  A Substitute Investment Vehicle? Using alternative investments as a substitute to the long-established stock and bond investments can alleviate some of the traditional investment volatility typically found in the stock market.  In addition, many alternatives such as real estate, private equity, and hedge funds will outperform customary stock investments, albeit with less liquidity.  In addition, a few alternatives like hybrid insurance products may one day replace the ever-shrinking pension plan once used for retirement.  Nonetheless, there appears to be a growing need, not only in mature markets but also in emerging markets, to supplement investor’s retirement with alternative investments which offer a greater chance of asset returns.   Sebastian, (2014) explores alternative investments by comparing their risk and rewards of alternative investments such as private equity, real estate, and hedge funds.  The author disc...