We closely monitor which articles draw the most readership. This allows us to fine-tune our content to the preferences of our audience. We return to themes and subjects that we know are of interest to our readers, while introducing new ideas and topics that we believe are important to the advisory profession. You can see the most popular articles in the left margin of this article.
Reflecting on those articles that were most popular over the last year, however, we believe other articles also deserved your attention.
Below, in no particular order, are the top 10 articles you may not have read in the last year – but should have:
1. The Retirement Portfolio Showdown: Jeremy Siegel v. Zvi Bodie
When investing for retirement over long time horizons, advisors can choose from two apparently conflicting approaches. They can follow the advice of Wharton professor Jeremy Siegel, who has steadfastly advocated equity-centric portfolios, most notably in his highly popular book, Stocks for the Long Run. Or they can listen to Boston University professor Zvi Bodie, who says equities are simply too risky over the long term, and the core of a retirement portfolio should be Treasury Inflation Protected Securities (TIPS).
Siegel and Bodie cannot both be correct. Understanding which approach is best for long-term investors, however, requires an analysis of the subtle risk and return tradeoffs an investor faces. A sophisticated Monte Carlo simulation reveals how to reconcile these apparently conflicting conceptual models, as Geoff Considine demonstrates.
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Bruce Greenwald on Structural Problems in the Economy and Unemployment
Bruce Greenwald is a recognized expert on value investing. A professor of finance at Columbia University and Director of Research at First Eagle Funds, he is the author of the books “Value Investing: from Graham to Buffett and Beyond” and “Competition Demystified: A Radically Simplified Approach to Business Strategy.”
In this interview, Greenwald explains the parallels between the recoveries from the Great Depression and the Great Recession, and why structural problems in the economy may cause unemployment to rise to 14% or 15% before it recedes.
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A Safer Four Percent Withdrawal Rule
Financial planners cite few principles as often as the “4% rule.” Originally developed by William Bengen in 1994, it argues that investors can safely withdraw 4% from a retiree's balanced stock/bond portfolio in the first year, and then adjust that dollar amount upward each year for inflation. This withdrawal rate has proven to be sustainable over every 30-year period since 1926, sometimes just barely, sometimes leaving the heirs with many millions of additional dollars.
Under current market conditions, however, investors can adopt a superior approach.
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Ned Davis: The Cyclical Bull Rally is Not Over
In February of last year, Ned Davis, president and senior investment strategist of the Florida-based institutional research firm that bears his name, correctly forecast last year’s market decline. In February of this year, he called the market rally that began in March.
When he spoke in November, he said that cyclical bull rally was not over.
