SIM Open House 2013.

Thinking of pursuing a Diploma, a Bachelor’s or a Master’s Degree?

You might want to consider going to SIM Open House 2013 and learn more about what SIM Global Education (SIM GE) has to offer.

Partnering 11 international universities that include the University of London, RMIT University, University of Manchester and University of Birmingham, SIM GE offers more than 50 full-time and part-time programmes.

Also, find out more about the scholarships available!

Be entertained and inspired as current students put on an exclusive showcase of music, dance and martial arts. Go on a campus tour of SIM Headquarters and hostel facilities!

Help is also at hand to assist parents who want to learn how to guide their child in making an informed education choice.

Start by visiting online:
SIM Open House 2013.

A banker's advice on retirement income strategy.

This is from the blog of a reputable bank providing advice to retirees:

... Start by figuring out how much spending money you will need from your portfolio over the next five years. Let's say you are using a 4% portfolio withdrawal rate, which means you plan to spend a sum equal to roughly 20% of your portfolio's current value over the next five years.

You might take that 20% and stash it in conservative holdings like savings accounts, certificates of deposit and short-term bonds, so you know that you have the next five years of anticipated spending covered, no matter what happens to the rest of your portfolio.

You can then invest the other 80% of your nest egg for total return using an appropriate mix of riskier bonds, U.S. stocks and foreign shares. You will want to consider carefully what combination of stocks, bonds and other asset classes to buy, because each has its own unique benefits and risks, and also how to diversify within each of these asset classes.

In years when the markets are kind, you might cash in some of your gains and use it to replenish your pot of spending money, so it once again holds enough to cover five years' worth of portfolio withdrawals. What if the markets aren't so kind? You could sit tight and see if the markets recover. Thanks to your five years of spending money in more conservative holdings, you should be able to go that length of time without touching the 80% of your portfolio that's invested for total return.



AK71 says,
"Sailing into the sunset should not be sailing into the dark."

Basically, it is advising retirees to take out what they need in spending money over the next five years and invest the rest in a mix of riskier bonds (junk bonds?) and equities. In case Mr. Market is not kind over the next five years, these retirees are still OK because they would have already put aside enough spending money for that period of time.

I want to draw attention to the words I have underlined. These are basically the ideas I have problems with.

Is securing five years of spending money without taking into account average inflation enough to provide a peace of mind for retirees? What is an appropriate mix of riskier bonds etc. and are riskier bonds even appropriate? Sit tight and see if the markets recover if things don't go well? That sounds like plenty of hope analysis to me.

I am most uncomfortable that retirees should be mostly invested and 80% in this case. What if the markets should go into a protracted downturn? Being retirees, these people are less likely to have the ability to fill up another war chest with earned income. Shouldn't they have a war chest ready just in case Mr. Market suffers from a bout of manic depression?

I don't have a Degree in banking or wealth management. I am just another retail investor sharing his concerns using what he feels is common sense.

Please forgive my ignorance.

Related posts:
1. Be cautious even as we accept higher risk.
2. A letter from a 66 year old retiree.
3. If we want peace, be prepared for war!