Blog Archives
BCI April 11, 2019
Posted in pmp BCI
How Good Are Target-Date Glidepath Savings Programs During the Accumulation Phase Towards Retirement?
- This study analyzes Yale’s Qualified Default Investment Alternative, a retirement plan with a target-date strategy. The findings also apply in principle to target-date strategy models from Vanguard, Fidelity, and others.
- Yale University’s new retirement plan provides a “Glidepath” Target-Date Plus Service and also allows participants to opt out from it to pick their own investments from a few select funds.
- Backtests (1999-2019) show that Yale’s Glidepath strategy would not have performed particularly well; one would have done better selecting one’s own funds, or by following the traditional 60%Stock-40%Bond constant allocation.
- Retirement savings were calculated for a hypothetical individual making contributions to a retirement fund from Jan-2000 onwards using various allocation strategies, including Yale’s Glidepath and also a reverse glide-path strategy.
- Much higher savings with relatively low risks can be obtained by employing a dynamic investment strategy using models which have moderately different allocations for up- and down-market conditions.
The Unemployment Rate May Soon Signal A Recession: Update – April 5, 2019
- For what is considered to be a lagging indicator of the economy, the unemployment rate provides surprisingly good signals for the beginning and end of recessions.
- This model, backtested to 1948, reliably provided recession signals.
- The model, updated with the January 2019 rate of 4.0%, does not signal a recession.
- However, if unemployment rate rises to 4.1% in the coming months the model would then signal recession.
Posted in UER
No Sight of Next Recession: Business Cycle Index Update 4/4/2019
Is your investment strategy protecting your assets from the next recession? Our Business Cycle Index is a tool to help you gauge recession risk.
Posted in BCI
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