When reviewing your portfolio, it’s important to understand not only historical returns but how much risk was required to get those returns. For instance a 6 percent unsecured loan to a friend probably has much more risk than an investment grade bond yielding 6 percent. Portfolios with low risk are more desirable to portfolios with…

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Everyone who reaches retirement age needs to determine how to maximize their Social Security benefits. For those born between 1943 and 1954, full retirement age is 66. Anyone is free to start as early as age 62 in exchange for receiving about 30 percent less benefits for the rest of their life. Alternatively, you can…

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I recently attended a lecture with Roger Ibbotson, an emeritus finance professor from Yale business school, and had the opportunity to speak with him afterward. Ibbotson recently completed extensive historical research on the performance of bonds versus uncapped index annuities. Traditionally, index annuities placed caps or limits on upside performance. Uncapped index annuities do not…

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The S&P 500 consists of 500 of the country’s largest publicly traded companies. These companies include the following sectors: energy, technology, consumer staples, consumer discretionary, financials, health care, industrial, materials, telecommunication, utilities and real estate. At first glance, this seems like adequate diversification. However, the S&P 500 is market cap weighted, which means that the…

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