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The Mutual Fund Puzzle
by David Blanchett, 7/6/20

While the “annuity puzzle” is well-documented in the academic literature, there is no “mutual fund puzzle.”

Robos Haven’t Failed – They Get an "A" for Being Average
by David Blanchett, 6/8/20

From a performance perspective, I give robos an “A” for being average, and hope that future research can make more meaningful statements as to how robos truly impact investor outcomes.

What Advisors Miss When it Comes to Inflation and Annuities
by David Blanchett, 7/29/19

The fact only roughly 1 in 20 annuity quotes include a COLA suggests that advisors are not considering, and retirees are not being provided with, information that is essential for determining the optimal annuity benefit payment structure.

Inflation-Linked SPIAs Are a Bad Deal
by David Blanchett, 5/20/19

I recently traded emails with someone who is provably smarter than me. He was very interested in buying a SPIA with payments linked to inflation, which is also called a real annuity. Real annuities are often depicted as perfect for a retiree. But after obtaining some quotes and running an analysis, I concluded the idea was “nuts.”

Testing DALBAR’s Claims about Mutual Fund Investors
by David Blanchett, 5/8/17

DALBAR’s report is commonly cited as “proof” that mutual fund investors have historically made poor market-timing decisions. While DALBAR does not publicly disclose its approach, in this article I use a transparent and industry-accepted methodology, based on publicly available data, to demonstrate that investors’ returns have not been nearly as bad as DALBAR claims.

The Best Asset Allocation for Retirees
by David Blanchett, 4/21/15
In this article, I determine the optimal glide path for retirees using varying initial bond yields and stock market valuations.

Retiring in a Low-Return Environment
by David Blanchett, Michael Finke and Wade Pfau, 1/20/15
Low bond yields and high equity valuations suggest lower spending for retirees. Prior research forecasted the impact on safe-withdrawal rates (SWRs), but a more sophisticated model can improve the accuracy of those predictions. We show just how low the SWRs should be for today's retirees.

Jeremy Siegel vs. Zvi Bodie: Does Equity Risk Decrease Over Time?
by David Blanchett, Michael Finke and Wade Pfau, 9/23/14
Stocks should be the asset class of choice for the long run, according to Wharton Professor Jeremy Siegel - and he has provided the data to prove it. But that paradigm has been challenged by Boston University Professor Zvi Bodie and others, who have shown that stocks become riskier the longer one owns them. Either view has profound implications for whether equity allocations should increase or decrease over time. Using Monte Carlo simulations, we provide guidance for the advisory profession.

Can Retirees Still Use a 4% Withdrawal Rate? Practical Applications of Monte Carlo Analysis
by Wade Pfau and David Blanchett, 9/2/14
Some advisors remain critical of Monte Carlo simulations, instead preferring to use analysis based on rolling historical periods or specific pre-defined scenarios. We believe Monte Carlo is a superior tool for measuring the uncertainties in long-term financial planning. As an example, we use it to predict the likelihood of a successful 4% withdrawal rate under today's market conditions.

The Power and Limitations of Monte Carlo Simulations
by David Blanchett and Wade Pfau, 8/26/14
Explaining the past is much easier than predicting the future. This uncertainty raises a significant number of issues when creating a financial plan for a client. Monte Carlo simulations will illuminate the nature of that uncertainty, but only if advisors understand how it should be applied - and its limitations.
10 results found.