With Treasury 10-year-note yields approaching their lowest this year, we take a look at the slowing economy and what it may signal for the markets. We then turn to a discussion of how to make your retirement portfolio last longer. While conventional wisdom leads many retirees to tap Social Security early and delay touching their IRA savings, the opposite strategy may be more helpful in the long run. Low interest rates make wealth accumulation more challenging for savers, but they are here to stay for the forseeable future. Our next article explains financial repression and why low interest rates have become a fixture of government policy here and abroad. Our last entry this week is from Jeremy Grantham, founder of the multi billion dollar investment management firm GMO. In “The Race of Our Lives”, he talks about the competition between innovators and defenders of the status quo in a race that may determine the fate of our global economy.
Treasury 10-Year Yield At Almost 2013 Low As U.S. Spending Slows-Treasury 10-year-note yields traded at almost the lowest this year as U.S. personal spending slowed last month, signaling reduced economic growth and underpinning demand for the securities. Susanne Walker writes for Bloomberg about the slowdown in consumer spending and its effect on the markets.
Tap An IRA Early, Delay Social Security– This strategy could lower your lifetime tax bite, let you collect higher benefits and extend the longevity of your portfolio. http://www.kiplinger.com/article/retirement/T051-C000-S004-tap-an-ira-early-delay-social-security.html
Financial Repression: Why It Matters– Financial repression refers to a set of governmental policies that keep real interest rates low or negative with the unstated intention of generating cheap funding for government spending. The ramifications of these policies will be measured in decades, not years. Shane Sheperd of Research Affiliates explains why.
The Race of Our Lives– Jeremy Grantham, founder of the multi billion dollar investment management firm GMO, writes an article which is a must-read each quarter. He discusses how our global economy, reckless in its use of all resources and natural systems, shows many of the indicators of potential failure that brought down civilizations in the past. By sheer luck, though, ours has two features that might just save our bacon: declining fertility rates and progress in alternative energy. http://www.gmo.com/websitecontent/GMO_QtlyLetter_1Q2013.pdf
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John R. Day, Bill Ennis and Stephanie Davidson