Day: September 4, 2019

RetireMentors: Why target-date funds are the best retirement investment

This post was originally published on this site

There’s not much that’s flashy or glamorous about a target-date retirement fund. It’s kind of boring, actually.

But in this case, boring is brilliant. Really.

I’m in the process of writing a new book to teach young investors how to maximize the probability that they’ll have more than enough money to live well in retirement.

The heart of the book is made up of a dozen short chapters, each one detailing what I call a small step with a big payoff.

Every one of these steps has the potential to add $1 million to their eventual wealth.

Here’s what’s really amazing: If you invest in a target-date retirement fund, you’ll be taking most of these steps automatically, without any effort.

Warren Buffett said: “You only have to do a very few things right in your life as long as you don’t do too many things wrong.” In my view, a target-date fund is amply qualified to be among the “few things right” in the life of an investor.

Let me tell you nine reasons investors should learn to love these boring funds.

1. A single decision is all that’s needed. You don’t have to choose a manager, sort through asset classes or worry about how much risk you should take. Just figure out approximately what year you want to retire, and you’re on your way.

2. You don’t have to worry about how you should respond to whatever the stock market is doing. With the sense that someone else is taking care of that, there’s no reason to panic.

3. Other investors may need to rebalance their assets from time to time — and many of them will neglect this chore for long stretches. But you won’t. Your target-date fund takes care of that automatically.

4. One of the biggest attributes of target-date funds is the “glide path” that gradually reduces your exposure to equities and tempers your portfolio’s volatility with a gradually increasing stake in bonds. You don’t have to think about this; it will just happen.

5. You won’t need to chase investment fads or try to “time” the market. If something new comes along that is indisputably valuable, your target-date fund will probably get on board.

6. A target-date fund won’t lead you into risky territory. They tend to be quite conservative, sort of like a stuffy grandfather who wants you to stick to what’s tried and true. This means you don’t have to understand — or think — much about risk.

7. The best target-date funds offer lots of diversification by building their portfolios with low-cost index funds. This is beneficial for all sorts of reasons. Not the least of them: It makes it easy to accept that you own some asset classes (think international stocks) that you might not feel comfortable about doing on your own.

8. Target-date funds make it effortless and automatic for you to do several things you should do but that you may not feel like doing.

•For example, if you’re overly cautious, investing heavily in equities when you are young.

•For example, if you tend to be aggressive, transitioning to bonds as you get older.

•For example, if you’re nervous during market volatility, continuing to invest during bear markets.

9. Even the relatively few shortcomings of target-date funds are pretty easy to overcome. One of those shortcomings is an overreliance on large-cap stocks like those in the S&P 500 index SPX, +0.91%.

This deprives investors of the long-term growth they are likely to get from owning small-cap stocks and value stocks.

Here’s an answer: If you put 90% of your money in a target-date fund and the other 10% into a small-cap value fund, the historical returns suggest you can wind up with anywhere from 10% to 50% more money in retirement. The benefit of supplementing a target-date fund with a small-cap value fund, in fact, is one of the main points of my new book.

You can learn more at my website. There you will find links to articles, a podcast, and a 50-minute video.

Richard Buck contributed to this article.

Bad news, home sellers: You’re less likely to see a bidding war for your property

This post was originally published on this site

Home buyers didn’t need to put up much of a fight to score their dream home last month.

Only 10.4% of the offers made by Redfin agents on behalf of home buyers sparked a bidding war in August, the real estate brokerage reported Wednesday. That’s down from 11.4% the month prior, representing the lowest bidding-war rate Redfin has recorded since at least 2011.

It’s a far cry from a year earlier, when 42% of Redfin-written offers faced competition. The national bidding war rate reached its all-time high in March 2018, when 59% of Redfin’s offers were met with competing bids.

And though popular housing markets like San Francisco, Los Angeles and Boston still see elevated bidding-war rates, competition is much less fierce even in those locales. Nearly a third of Redfin-made offers (31%) in San Francisco saw competition in August — but that’s less than half the share that faced a bidding war a year earlier (73.5%).

The relative lack of bidding wars isn’t likely to please most home sellers, as competition among offers can boost the ultimate selling price of a home.

Also see: The surprising ways foreclosures make housing-market downturns even worse

The report from Redfin RDFN, +0.82%  adds to the mixed signals the housing market has been sending in recent weeks. There’s been some evidence that the precipitous drop in mortgage rates throughout the summer has led to an uptick in sales activity. At the same time, affordability and inventory-related constraints persist, keeping many prospective home buyers out of the market. Recent geopolitical concerns have also represented a downer for the housing market.

“Recession fears have been enough to spook some would-be buyers from making the big financial commitment of a home purchase,” Redfin chief economist Daryl Fairweather said in the report. Fairweather noted though that consumers could acclimate to the volatility in markets if a recession doesn’t occur this fall or winter — and if they do get used to that new normal, they may begin to start taking advantage of the low rates in earnest.

Redfin shares are up 3.06% over the last three months. That’s in line with the Dow Jones Industrial Average DJIA, +0.61%  and the S&P 500 SPX, +0.64%, which are up 3.04% and 3.69% respectively over that same period.

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LiteLink Technologies Provides Corporate Update

This post was originally published on this site

VANCOUVER, British Columbia, Sept. 04, 2019 (GLOBE NEWSWIRE) — LiteLink Technologies Inc. (“LiteLink”) (CSE:LLT)(FRA:C0B)(OTC:LLNKF), a key player in logistics platforms and payment solutions, is pleased to provide the following corporate update to inform shareholders about its current software developments and operations.

1SHIFT Marketing Update

The 1SHIFT Logistics platform has reached maturity and LiteLink has shifted its efforts to sales and marketing across North America. LiteLink has added an additional sales office in Montreal to increase its sales presence in Eastern Canada. In addition to physical sales offices, 1SHIFT is engaging in digital product marketing to maximize lead generation and sales with a focus on increasing efforts in Q3.

The initial focus is to provide 1SHIFT Logistics to carriers, brokers, and shippers across North America this year, followed by expansions into South America in early 2020. With the existing trade issues reducing overall global freight to the U.S., the need to further reduce operating costs in logistics is a bigger issue now than ever.

In addition to rolling out its 1SHIFT Logistics platform, LiteLink is working with Deloitte Canada to bring the technical experience to key client engagements.

1SHIFT Product Update

Beta testing of the product trials of 1SHIFT has been successful. The 1SHIFT Platform enables an ecosystem of shippers, 3PLs, carriers, and drivers to contract loads, track shipments in real-time, proactively manage errors and disputes for on-time deliveries and expedite payments to improve end-to-end efficiency.

After onboarding Inline Nurseries Inc. and completing customer trials with Peak Logistics, JMG Carriers and Playbook Logistics throughout the summer, the 1SHIFT user experience has been fully optimized. A major barrier for adoption in the logistics business is adopting new technology that requires training and takes time to implement. The newest version of 1SHIFT allows users to signup and use the platform in less than five minutes, removing this barrier.

The development of the 1SHIFT app is complete and can be downloaded and utilized by any transportation carrier, fleet, shipper or broker. The 1SHIFT app is available through the Apple Store and Google Play Store, as well as on any web platform.

The latest version of the 1SHIFT Logistics platform includes:

  • Fully automated dispatch to any fleet, carrier, or internally operated trucks. A full turnkey fleet management system.
  • Real-time Logistics problem management – real-time problems raised by drivers, dispatch, by the system are presented before or right when they happen without any delay via email or phone calls
  • Detention Fee Dispute Center – a bulletproof blockchain solution that collects records from multiple sources to reduce unwarranted detention fees
  • Integration to Enterprise Supply Chain & TMS Platforms such as SAP
  • Integration into government-regulated devices ELDs and IOT truck sensors
  • Remote driver problem handling – customer care can now log in and see the same problems users are seeing to resolve with a mirror view

1SHIFT leverages Amazon web service infrastructure using the latest logistics prediction algorithms and integrated mapping services to provide the most advanced visibility and management of freight and digitizes all supporting documentation for a fully paperless environment.

LiteLink is continuing to focus on improving the 1SHIFT customer experience by offering training in multiple languages and has implemented several improvements in customer care with real-time troubleshooting and online training videos.

Moving forward, LiteLink plans to release two major features for 1SHIFT before the end of this year that will effectively remove the manual work done today by logistics specialists. The addition of deep machine learning and predictive pricing is expected to set the Company apart.

uBUCK Update

uBUCK Technologies SEZC (“uBUCK”), a wholly-owned subsidiary of LiteLink Technologies, has been developing its digital payment and debit card platform by engaging additional card program managers and technology partners.

uBUCK has continued to build on its partnership with Datable Technology Corp. over the summer. The commercial relationship involves the integration of Datable’s loyalty and rewards program into uBUCK’s digital payment platform and the addition of the uBUCK prepaid credit card to Datable’s gift card offering.

Apart from enhancing its payments platform, uBUCK is also preparing for its first live commercial event with Enthusiast Gaming. The Enthusiast Gaming Live Expo takes place in Toronto in October 2019 and is expected to bring in over 55,000 attendees.

uBUCK’s Streambucks is the official payment sponsor of the event and will be the official digital wallet and remittance transfer partner for Enthusiast’s tournaments. New customers at this event will receive incentives for signing up and installing the uBUCK digital wallet on their mobile devices.

Website Update

In an effort to extend its reach to global logistics markets, LiteLink has fully revamped its 1SHIFT website and strengthened its branding to align with large enterprise product offerings. To check out the new website, visit https://1shiftlogistics.com/.

LiteLink has gained critical knowledge regarding its implementation and change-management framework. The Company has used this knowledge to further refine its processes and believes this learning experience will create a strong foundation for success moving forward.

The Company has also gained critical feedback on customer acquisition costs as well as anticipated sales cycles, which were longer than anticipated.

Near-Future Outlook for LiteLink

LiteLink focused primarily on developing growth partner relationships and signing on customers over the summer. The focus will remain the same throughout this year with the objective to acquire as many customers as possible across North America. LiteLink has several deals in the pipeline that are near maturity and its cash position remains strong.

About LiteLink Technologies Inc.

LiteLink Technologies Inc. (“LiteLink”) (CSE:LLT)(FRA:C0B)(OTC:LLNKF) is a major player in developing world-class enterprise platforms that utilize artificial intelligence, blockchain, and predictive analytics to solve fragmented and outdated technology problems in the logistics and digital payment industries. Our flagship 1SHIFT logistics platform offers real-time transparency and tracking which allows brokers, shippers, and carriers to track shipments and settle payments in real-time. uBUCK Pay is a multi-currency digital wallet that supports traditional fiat and digital currencies. Consumers are able to make online and offline purchases using the uBUCK debit card and send funds worldwide for free.

About uBUCK Technologies SEZC

Based in Georgetown, Cayman Islands, uBUCK Tech is a fintech enterprise that specializes in decentralized digital payments and wallets. uBUCK Pay and Streambucks are P2P payment platforms offering consumers, businesses and merchants a fast, commission-free and highly secure alternative to traditional payment methods. uBUCK and Streambucks are stable utility tokens that are backed by the U.S. dollar via pin voucher purchases within the uBUCK Pay app or at participating resellers. Customers may load a uBUCK debit card and make online and offline purchases and send payments around the world for free.

Forward-Looking Statement

This news release may contain certain “Forward-Looking Statements” within the meaning of the United States Private Securities Litigation Reform Act of 1995 and applicable Canadian securities laws. When used in this news release, the words “anticipate”, “believe”, “estimate”, “expect”, “target”, “plan”, “forecast”, “may”, “schedule” and other similar words or expressions identify forward-looking statements or information.  These forward-looking statements or information may relate to the nature of the business of LiteLink, and other factors or information. Such statements represent LiteLink’s current views with respect to future events and are necessarily based upon a number of assumptions and estimate that, while considered reasonable by LiteLink, are inherently subject to significant business, economic, competitive, political and social risks, contingencies and uncertainties.  Many factors, both known and unknown, could cause results, performance or achievements to be materially different from the results, performance or achievements that are or may be expressed or implied by such forward-looking statements.  LiteLink does not intend and does not assume any obligation, to update these forward-looking statements or information to reflect changes in assumptions or changes in circumstances or any other events affections such statements and information other than as required by applicable laws, rules, and regulations.

Please visit the company’s website at litelinktech.com. For a free report on LiteLink Technologies Inc. (CSE:BAXS) (FRA:C0B) visit cryptocurrencynews.com.

Please See Disclaimer

LiteLink Technologies Provides Corporate Update

This post was originally published on this site

VANCOUVER, British Columbia, Sept. 04, 2019 (GLOBE NEWSWIRE) — LiteLink Technologies Inc. (“LiteLink”) (CSE:LLT)(FRA:C0B)(OTC:LLNKF), a key player in logistics platforms and payment solutions, is pleased to provide the following corporate update to inform shareholders about its current software developments and operations.

1SHIFT Marketing Update

The 1SHIFT Logistics platform has reached maturity and LiteLink has shifted its efforts to sales and marketing across North America. LiteLink has added an additional sales office in Montreal to increase its sales presence in Eastern Canada. In addition to physical sales offices, 1SHIFT is engaging in digital product marketing to maximize lead generation and sales with a focus on increasing efforts in Q3.

The initial focus is to provide 1SHIFT Logistics to carriers, brokers, and shippers across North America this year, followed by expansions into South America in early 2020. With the existing trade issues reducing overall global freight to the U.S., the need to further reduce operating costs in logistics is a bigger issue now than ever.

In addition to rolling out its 1SHIFT Logistics platform, LiteLink is working with Deloitte Canada to bring the technical experience to key client engagements.

1SHIFT Product Update

Beta testing of the product trials of 1SHIFT has been successful. The 1SHIFT Platform enables an ecosystem of shippers, 3PLs, carriers, and drivers to contract loads, track shipments in real-time, proactively manage errors and disputes for on-time deliveries and expedite payments to improve end-to-end efficiency.

After onboarding Inline Nurseries Inc. and completing customer trials with Peak Logistics, JMG Carriers and Playbook Logistics throughout the summer, the 1SHIFT user experience has been fully optimized. A major barrier for adoption in the logistics business is adopting new technology that requires training and takes time to implement. The newest version of 1SHIFT allows users to signup and use the platform in less than five minutes, removing this barrier.

The development of the 1SHIFT app is complete and can be downloaded and utilized by any transportation carrier, fleet, shipper or broker. The 1SHIFT app is available through the Apple Store and Google Play Store, as well as on any web platform.

The latest version of the 1SHIFT Logistics platform includes:

  • Fully automated dispatch to any fleet, carrier, or internally operated trucks. A full turnkey fleet management system.
  • Real-time Logistics problem management – real-time problems raised by drivers, dispatch, by the system are presented before or right when they happen without any delay via email or phone calls
  • Detention Fee Dispute Center – a bulletproof blockchain solution that collects records from multiple sources to reduce unwarranted detention fees
  • Integration to Enterprise Supply Chain & TMS Platforms such as SAP
  • Integration into government-regulated devices ELDs and IOT truck sensors
  • Remote driver problem handling – customer care can now log in and see the same problems users are seeing to resolve with a mirror view

1SHIFT leverages Amazon web service infrastructure using the latest logistics prediction algorithms and integrated mapping services to provide the most advanced visibility and management of freight and digitizes all supporting documentation for a fully paperless environment.

LiteLink is continuing to focus on improving the 1SHIFT customer experience by offering training in multiple languages and has implemented several improvements in customer care with real-time troubleshooting and online training videos.

Moving forward, LiteLink plans to release two major features for 1SHIFT before the end of this year that will effectively remove the manual work done today by logistics specialists. The addition of deep machine learning and predictive pricing is expected to set the Company apart.

uBUCK Update

uBUCK Technologies SEZC (“uBUCK”), a wholly-owned subsidiary of LiteLink Technologies, has been developing its digital payment and debit card platform by engaging additional card program managers and technology partners.

uBUCK has continued to build on its partnership with Datable Technology Corp. over the summer. The commercial relationship involves the integration of Datable’s loyalty and rewards program into uBUCK’s digital payment platform and the addition of the uBUCK prepaid credit card to Datable’s gift card offering.

Apart from enhancing its payments platform, uBUCK is also preparing for its first live commercial event with Enthusiast Gaming. The Enthusiast Gaming Live Expo takes place in Toronto in October 2019 and is expected to bring in over 55,000 attendees.

uBUCK’s Streambucks is the official payment sponsor of the event and will be the official digital wallet and remittance transfer partner for Enthusiast’s tournaments. New customers at this event will receive incentives for signing up and installing the uBUCK digital wallet on their mobile devices.

Website Update

In an effort to extend its reach to global logistics markets, LiteLink has fully revamped its 1SHIFT website and strengthened its branding to align with large enterprise product offerings. To check out the new website, visit https://1shiftlogistics.com/.

LiteLink has gained critical knowledge regarding its implementation and change-management framework. The Company has used this knowledge to further refine its processes and believes this learning experience will create a strong foundation for success moving forward.

The Company has also gained critical feedback on customer acquisition costs as well as anticipated sales cycles, which were longer than anticipated.

Near-Future Outlook for LiteLink

LiteLink focused primarily on developing growth partner relationships and signing on customers over the summer. The focus will remain the same throughout this year with the objective to acquire as many customers as possible across North America. LiteLink has several deals in the pipeline that are near maturity and its cash position remains strong.

About LiteLink Technologies Inc.

LiteLink Technologies Inc. (“LiteLink”) (CSE:LLT)(FRA:C0B)(OTC:LLNKF) is a major player in developing world-class enterprise platforms that utilize artificial intelligence, blockchain, and predictive analytics to solve fragmented and outdated technology problems in the logistics and digital payment industries. Our flagship 1SHIFT logistics platform offers real-time transparency and tracking which allows brokers, shippers, and carriers to track shipments and settle payments in real-time. uBUCK Pay is a multi-currency digital wallet that supports traditional fiat and digital currencies. Consumers are able to make online and offline purchases using the uBUCK debit card and send funds worldwide for free.

About uBUCK Technologies SEZC

Based in Georgetown, Cayman Islands, uBUCK Tech is a fintech enterprise that specializes in decentralized digital payments and wallets. uBUCK Pay and Streambucks are P2P payment platforms offering consumers, businesses and merchants a fast, commission-free and highly secure alternative to traditional payment methods. uBUCK and Streambucks are stable utility tokens that are backed by the U.S. dollar via pin voucher purchases within the uBUCK Pay app or at participating resellers. Customers may load a uBUCK debit card and make online and offline purchases and send payments around the world for free.

Forward-Looking Statement

This news release may contain certain “Forward-Looking Statements” within the meaning of the United States Private Securities Litigation Reform Act of 1995 and applicable Canadian securities laws. When used in this news release, the words “anticipate”, “believe”, “estimate”, “expect”, “target”, “plan”, “forecast”, “may”, “schedule” and other similar words or expressions identify forward-looking statements or information.  These forward-looking statements or information may relate to the nature of the business of LiteLink, and other factors or information. Such statements represent LiteLink’s current views with respect to future events and are necessarily based upon a number of assumptions and estimate that, while considered reasonable by LiteLink, are inherently subject to significant business, economic, competitive, political and social risks, contingencies and uncertainties.  Many factors, both known and unknown, could cause results, performance or achievements to be materially different from the results, performance or achievements that are or may be expressed or implied by such forward-looking statements.  LiteLink does not intend and does not assume any obligation, to update these forward-looking statements or information to reflect changes in assumptions or changes in circumstances or any other events affections such statements and information other than as required by applicable laws, rules, and regulations.

Please See Disclaimer

Outside the Box: I ran this checkup on my stock-market investments because I’m worried about recession

This post was originally published on this site

A recession is coming. As long as the economy moves in cycles, a recession will always be coming. Right now there is more talk about a downturn than usual. You can’t pick up a newspaper or click on a financial site without finding some discussion of recession indicators and concerns.

What should you do?

Understand that my track record at predicting recessions and timing the market is no better than anybody else’s. I stopped trying long ago. That said, I have invested through several recessions, and expect to live through several more.

What experience I have, I will share, along with my own preparations and thoughts as we face increasing prospects of an economic downturn….

History

My memories of the dot-com crash are starting to fade. It was mostly a footnote to my financial progress. At the time our net worth was around $500,000, so we had meaningful investments, but I was nowhere near financial independence or retirement. I knew enough to keep investing in broad-based, low-fee mutual funds, and I didn’t change my strategy. Though I did lose money in some small speculations on the side.

The Great Recession of 2008-2009 was another story. My net worth had recently crested $1 million and I was beginning to entertain thoughts of early retirement. I was reading everything I could find on the topic. I was also playing with the rudimentary retirement calculators of the day as well as running my own models.

Then the bottom fell out of the stock market DJIA, -1.08% and the economy. This time around I knew much more about investing. I rebalanced my portfolio as best I could. I kept up my 401(k) contributions, even increased them near the bottom. But, though I still expected to retire early, I gave up all hope of retiring on any schedule. That would have to wait for economic conditions to improve, and it was several years before I could revisit the question.

When I finally did retire in April of 2011, the economy was much more auspicious. In fact, we now know it was the start of a record bull market.

That market, I’ll admit, has made the first stage of my retirement much easier. The threat of sequence of returns risk has steadily diminished with each passing year of growth. After the first half-decade of early retirement, no longer obsessed with running retirement calculators or honing our budget, we’ve been able to put our finances on autopilot, and spend some extra on luxuries.

But, neither you nor I should be seduced into recklessness by the ease of my first decade in retirement. We are that much further into the economic cycle, and storm clouds are gathering….

Signs of recession

Given that we are in the midst of the longest bull market in American history, it’s no surprise that pundits have been predicting its demise for some time. It could be tempting to dismiss them for crying wolf.

Except that markets have always been cyclical. Betting against that behavior seems a lot less wise than assuming we will again be in a recession eventually.

Add to that inevitability that some leading indicators have begun to lag. There is weakness in manufacturing and farming, and business investment is soft.

Another indicator, the yield curve for government bonds, has “inverted.” This means investors are willing to take less interest to lock up their money for longer time periods, because they believe the economy looks bad in the short term. It’s an arcane statistic, except it’s preceded every recession — on average 14 months in advance — for more than 50 years.

Add to those signs the trade war with China, with tariffs at levels we haven’t seen in most of our lifetimes, and global trade volume down. There are many reasons to be pessimistic about the economy now.

Opinion: The other dangerous trade wars investors shouldn’t overlook

Though to be fair, there are positive indicators too as well as indicators that haven’t turned negative yet. Consumer spending is a big one, though consumers are notably fickle and can easily shut their wallets at the first sign of bad news — economic or political. Also, unemployment remains low, though it, too, is a short-term indicator without much predictive value.

Finally, nobody can precisely predict the timing of economic cycles. As alarming as things might look, most experts don’t believe that a recession has started yet, and many don’t even believe one is imminent.

Preparing: Income/cash

The most important area to address and protect in preparation for a recession or depression, in my view, is your income. But that means different things to different people:

If you are a 20- or 30-something, we’re talking having a job and job security. Being newer in your job and career, you may not have much of that, unfortunately. A recession could threaten your employment with layoffs. But there are still steps you can take to improve your situation: You can optimize your efforts at work to make sure you’re seen as indispensable. You can broaden and exercise your professional network to make sure you have leads in the pipeline should you need a new job. And you can beef up your emergency fund with six to 12 months of living expenses, so you don’t have to panic about losing lifestyle or a roof over your head if you’re between jobs for a while.

For a typical baby boomer retiree, it’s different. You probably have minimal to no pension, and a Social Security payment that doesn’t cover all your living expenses. Perhaps you have an annuity that smooths out your income stream. If so, that’s great. Though, unless it’s inflation-adjusted, you may still need to harvest investments to meet ongoing expenses over time.

For typical recent retirees, income security is all about cash on hand.

In the end, many of us will need to sell some investments from time to time to provide cash for living expenses. And it’s having cash on hand that prevents us from having to make those sales at the worst times during a recession.

How much cash do you need? In my second book I review statistics from the Schwab Center for Financial Research, retirement researcher Wade Pfau, and the National Bureau of Economic Research on how long market cycles last. My conclusion: “Bottom line, to outlast a run-of-the-mill bear market, you should have three years of cash on hand. And for a worst-case recession/depression, you’d better have close to a decade worth of cash, plus other conservative investments you could rely on once cash runs out. “

Note, though “cash is king” in a downturn, the bigger point is that you need liquid assets that will hold their value. Short-term bonds, gold, and other instruments can fit that description as well.

Read: Don’t avoid bonds — here’s how to build your own portfolio

Preparing: Debt

No matter how much you plan, your income is likely less secure during a recession. That means this is a time, more than any other, to avoid debt.

Debt represents an ongoing obligation for your cash flow. If you can’t meet that obligation, the repercussions are huge: losing a house or vehicle, or being forced to sell assets at a loss.

I’m never a fan of debt, and the implications for debtors during economic hard times are one major reason. As Warren Buffett famously says: “You only find out who is swimming naked when the tide goes out.” You don’t want to be caught overexposed to debt payments during hard economic times.

Not only debt, but any ongoing financial commitment is burdensome during a recession. So this is also a questionable time to be signing up for expensive new memberships, or subscriptions, or any ongoing inflation of lifestyle.

Preparing: investments

What about your investments, specifically your asset allocation? Should that change going into a recession?

Generally, the answer is “NO.”

Because the timing of a recession is not predictable, your asset allocation should be designed to NOT need adjustment just because one is on the horizon. You should own the mixture of stocks and bonds that lets you sleep at night without needing to predict what kind of economy you’ll wake up to the next morning. That’s the whole point.

That said, if this is your first recession and you’re realizing that you are more risk-averse than you thought, or don’t know how risk averse you are, then making your asset allocation more conservative might be warranted.

And, if you’re a current retiree who needs cash for living expenses, and decides that now is a good time to sell potentially overpriced assets, I would not criticize. In fact, I’ve made that move myself.

Finally, one of the best steps you can take to prepare for a recession is to increase your knowledge and double-check your attitudes about market downturns: Do you understand that markets always go down at some point? That reacting after they go down is usually a terrible idea? That maintaining a diversified portfolio at all times is your best defense against panic and loss?

If you are unclear on any of these points, or doubting your commitment when the going gets tough, then more reading and thinking on long-term investing fundamentals are in order.

My portfolio checkup

I’ll end with a quick review of my own portfolio. I’m not in a panic by a long shot, but, yes, I’m concerned about the economy, and with maintaining our cash flow during the next inevitable recession. So this month I did a quick portfolio review, and made some small moves to make sure we are prepared.

Much of our stock holdings are in two balanced funds: Vanguard LifeStrategy Moderate Growth VSMGX, -0.33% and Vanguard Wellesley Income VWINX, -0.04% VWIAX, -0.02%. Though there are some trade-offs, such as not being able to access our stock or bond allocations separately, these funds greatly simplify our lives as we get older. They are “all-weather” holdings that we don’t have to worry about managing. We can leave them alone for long periods and withdraw from them as needed, without worrying about the state of the market. The 10-year return on the LifeStrategy fund is 8.43%. The 10-year return on Wellesley Income VWINX, -0.04% is 8.26%. Though it has been a bull market, those are wonderful returns for a conservative retirement portfolio.

However, there was one holding that felt a bit overweighted in the face of an aging bull market: Vanguard FTSE Social Index Fund Admiral Shares VFTAX, -0.84%. This is a pure stock fund of mostly large-cap growth companies. The four top holdings are Microsoft MSFT, -1.32%, Apple AAPL, -1.46%, Alphabet GOOG, -1.66% GOOGL, -1.76%   and Facebook FB, -1.77%. Though I’m an engineer and a fan of technology, I’m not wild about the headwinds facing these companies. Given that, coupled with the increasing possibility of a recession, I decided to make a small move.

This is what I do when I have concerns about my portfolio, but don’t want to overreact. I’ll make a small move of a few percentage points that helps me feel like I’ve “done something” without making major changes in my asset allocation or long-term strategy. So this week, I moved about 2% of my net worth from those highflying growth stocks to Vanguard’s Intermediate-Term Treasury Fund VFIUX, +0.17%. It happened in a retirement account, so there were no tax implications.

Next, I harvested about 3% of our net worth out of Vanguard Wellesley Income as cash. That increased our cash reserves to about three years of living expenses. Though I generally feel good about the fund, it has grown to an uncomfortably large proportion of our net worth (about 33%). Additionally, I’m not wild about any active management these days. And, though conservative, the Wellesley fund is actively managed. This sale was in a longstanding taxable account, so it will generate a capital gain. However the amount will be nowhere near large enough to push us out of the two lower tax brackets. So we’ll pay no tax on that gain.

My thought process when making investment decisions like these for harvesting income is always the same: If I take some money off the table now and the market keeps going up, no problem, we own enough stocks (more than 40% of our asset allocation) to benefit. On the other hand, if the market goes down, especially for an extended period, I will be very happy to have locked in a few more years of income. We aren’t needing or trying to get rich off the market these days. We just want to protect our nest egg from downturns (by holding enough bonds and cash) and from inflation (by holding enough stocks), while allowing for a little upside if things go well.

So as I write this, my asset allocation has settled at 42% stocks, 39% bonds, 7% gold, and 12% cash. As mentioned, our cash reserves are enough to cover several years of living expenses. Beyond the cash, we have gold and bonds to last a decade or more. Those are assets that typically hold up well during recessions, and can even appreciate when the economy is in the doldrums.

So my plodding, conservative portfolio is no speedboat, even in boom times. But, when the economic storm clouds gather and the seas begin to rise, the battleship-worthy diversification into reliable, old-fashioned asset classes is prudent and reassuring.

Darrow Kirkpatrick retired at 50 after a career as a software engineer. He writes on his blog, Can I Retire Yet, where this first appeared.

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Livability: The most affordable cities in Washington state—and they’re charming, too

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When you think of Washington, the first things that come to mind are usually apples, natural beauty and mild weather.

Yet, those who live in this Pacific Northwest state also know it offers great deals on housing, health care, groceries and utilities.

Using our tried-and-true methodology, Livability.com has come up with a list of the five most affordable cities in Washington. But this isn’t just a tally of cheap cities. Instead, quality of life was considered along with data from other cities to find the best bang for your residential buck.

Here’s a list of the most affordable cities in Washington state:

1.Olympia, Wash.

2.Richland, Wash.

3.Bothell, Wash.

4.Auburn, Wash.

5.Redmond, Wash.

1. Olympia

The state capital, Olympia has boating and fishing opportunities in Puget Sound, to-die-for seafood restaurants along the waterfront, and a growing arts community. On a clear day, you can even see Mount Rainier, which is a little more than an hour drive from the city.

Here the median household income is $52,834 with the median home price coming in at $240,800, which is lower than the state average.

Historic artesian wells still provide clean drinking water for those who know where to look and fill their bottles, although this is more of a fun activity rather than a water bill saving measure.

2. Richland

A part of the Tri-Cities area, which includes Pasco and Kennewick, Richland’s history is wrapped up in the Manhattan Project facility at the Hanford nuclear site.

iStock/Getty Images
The paddle boat Queen of the West is moored on the Columbia River at Amon Park in Richland, Wash.

The city is still known as a technology hub. The median household income is an impressive $69,372, while the median home price is $200,800. Residents enjoy outdoor activities such as hiking and biking on an extensive trail system, golfing and water sports on the Columbia and Yakima rivers.

The area has some of the most fertile agricultural land in the state, which is good for growing crops such as wine grapes and potatoes.

Related: 5 cheap and easy places to retire that you’ve probably never thought about

Richland is home to a renaissance fair, a classic car and street rod event and music and arts festivals.

3. Bothell

Those who want to live close to Seattle but don’t want to pay its expensive cost of living prices often chose Bothell as a more affordable alternative.The median home price is $344,600 – not too bad for this area. The median household income is $75,643.

Also see: The best affordable places to live in Colorado

While logging is mostly in the past, Bothell residents celebrate their own culture such as walks in urban/rural parks, a 1880s Pioneer Cemetery and a lavish Fourth of July event known as the Freedom Festival. 

4. Auburn

A little east of Tacoma and south of Seattle, Auburn provides a gateway to both major metropolitan areas. And that’s a good thing, as the city is a transportation hub with major roadways and the Transit Center, a station that provides bus, light rail and Sounder train service to the Puget Sound area. Those who live here can expect a median home price of $231,200, with a median household income of $57,635.

Thoroughbred horse racing at Emerald Downs (pictured above), golf and performing arts are just some of the attractions that entertain residents.

5. Redmond

A high-tech city, Redmond is the home headquarters to computer software king Microsoft MSFT, -1.32%   and videogaming systems company Nintendo of America NTDOY, +1.19%  . The city has also been recognized as a Best Place to Live and Top 99 Beer City

In addition to the tech industry, Redmond is also known as the “Bicycle Capital of the Northwest.” The Redmond Bike Derby, which is held during the summer’s Derby Days, is the longest running bicycle race in North America. With an extensive network of off- and on-street bike lanes and trails, Redmond also boasts a large share of bicycling commuters, so residents save on automobile purchases, car insurance prices and gas.

You might like: ‘Wine country’ doesn’t have to mean Napa and Sonoma: Here are 10 off-the-beaten-path wine destinations

The median home price is a robust $462,200. However, residents here also command higher salaries, with a median household income of $99,586. In fact, Redmond is so great that it landed a spot on the 2018 Top 100 Best Places to Live list. 

Read the original article on Livability.

Get ready for bigger home-price increases next year, except in these two states

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Just when it looked like home prices may have hit a ceiling, low interest rates could give them another boost.

A new report from real-estate data firm CoreLogic CLGX, -0.74%  suggests that annual home-price growth will increase by 5.4% by July 2020. That would represent a shift from what has happened over much of 2019.

The S&P CoreLogic Case-Shiller index for home prices, a widely-cited barometer for the national housing market, registered the slowest pace of home-price growth since 2012 in June of 2.1%. A year earlier, home prices were rising at an annual rate of 6.3%.

Some major housing markets, such as New York, Miami and Seattle, actually experienced a decline in home prices either on a monthly or annual basis, per the Case-Shiller index. In recent months, home-price growth had become weaker as would-be buyers were priced out of these and other markets.

CoreLogic’s Home Price Index was less pessimistic, registering a 3.6% uptick year-over-year in July. Like Case-Shiller, the report noted some parts of the country where prices had fallen, namely Connecticut and South Dakota.

But recent home sales data provides a silver lining for the housing market. Sales activity has picked up — albeit modestly — as consumers sought to take advantage of the low mortgage rates available currently.

Mortgage rates have fallen throughout much of 2019. Loan rates generally track the path of the 10-year Treasury note TMUBMUSD10Y, +1.73%. Treasury yields have fallen in recent months amid compounding concerns related to trade tensions and the state of the global economy.

“With the for-sale inventory remaining low in many markets, the pick-up in buying has nudged price growth up,” Frank Nothaft, chief economist at CoreLogic, said in the report. “If low interest rates and rising income continue, then we expect home-price growth will strengthen over the coming year.”

How much room home prices have to grow remains an open question. CoreLogic estimated that the real-estate markets in nearly one in four metropolitan areas were undervalued. CoreLogic defines an undervalued market as one where home prices are at least 10% below what it determines to be the sustainable level where supply and demand are balanced.

Meanwhile, 40% of markets were at value, according to CoreLogic. That means roughly a third of markets nationwide are overvalued — and that could mean that price growth could slow or prices could fall if enough buyers are priced out of the market again.

Two funds that tracks housing stocks, iShares Dow Jones US Home Construction ITB, -0.56%   and SPDR S&P Homebuilders XHB, -1.83%   have risen throughout 2019.

NerdWallet: The upside of renting for millennials

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This article is reprinted by permission from NerdWallet.

“Renting is just throwing money away.”

“Renting is like paying someone else instead of paying yourself.”

You may have heard these opinions from family and friends, but it’s not that simple. In some areas (looking at you, San Francisco), renting is far more economical than buying a home. But renting can be used to fatten your credit profile as a steppingstone to your financial goals.

Millennials want to buy but face barriers

Millennials are delaying homeownership and staying in rentals longer than previous generations, multiple studies show.

Student debt — that bane of millennial existence — is one factor pushing back the age of homeownership. Rising rents and home prices coupled with slow wage growth also make it hard to save for a down payment.

Read: This is the country’s most popular rental market

The vast majority of Americans — 9 out of 10 — still equate homeownership with personal success and economic security, according to a survey released in July by the website Apartment List. The survey of a nationally representative sample of people found both renters and homeowners believe there is a social stigma associated with renting.

How to make rent work for you

You cannot fully control how much money you make. But your credit score — the key to qualifying for rewards credit cards, financing a car or even a home — is largely under your control. Rent payments can be used to beef up your score.

Related: It makes more sense to rent than buy, but only if you live here

For many millennials, rent payments are a great way to demonstrate responsible behavior to potential creditors. But rent payments — unlike credit card, mortgage and loan payments — don’t automatically appear on credit reports. And your credit scores rely on what’s in your credit reports.

There are two ways to get rent added to your reports:

  • Ask your landlord. Two of the three major credit bureaus — Experian EXPGY, +2.31%   and TransUnion TRU, -0.22%    — accept payment information from landlords. Both bureaus’ websites have a simple process for landlords to sign up.
  • Do it yourself. You can use third-party companies such as RentTrack, Rock The Score and others to report rent payments directly to one or more bureaus for a monthly fee.

A 2017 TransUnion study followed 12,000 renters for a year. Scores rose 16 points on average within six months after rent reporting began, says Maitri Johnson, vice president of multifamily at TransUnion. The largest increase was for scores below 620, generally considered bad credit.

With rent reporting, payments show up on your credit report like any other account. Positive payments help your score; missed or late payments can damage it. If there are errors, you can dispute them with the bureaus.

What to know

Rent reporting lets you get credit for something you’re already doing. Better credit can get you a cash-back credit card or a cheaper car loan, saving you money in the short term and strengthening your finances for the long term. But rent reporting also has some drawbacks:

  • Not all credit scores factor in rent payments. FICO 8, the most widely used score by lenders, and the FICO versions used in mortgage lending do not use rental information to calculate scores. But newer versions, such as FICO 9 and FICO XD, do. VantageScore, FICO’s FICO, -0.20% main competitor, also uses rental payment information.

Even if it’s not something considered in your score, it’s still cosmetically on your credit report,” says John Ulzheimer, a credit expert who has worked at Equifax and FICO. “A lender considers information in good standing and that’s going to benefit you as an applicant.”

More: Follow this simple blueprint to manage your credit score

  • Reporting is not free. If you use a reporting service, you’ll pay a monthly fee ranging from $6.95 to $9.95 depending on the company, plus a one-time enrollment fee of $25 to $95. Extras like adding past rental information cost more.
Other ways to build credit

Ulzheimer points out that traditional credit-building methods are more effective than rent reporting: They don’t cost much, payments are typically reported to all three credit bureaus, and they influence all types of FICO scores and VantageScores.

  • You can become an authorized user on someone else’s credit card, preferably someone with a long history of responsible credit use.
  • You can get a secured credit card, which requires an upfront deposit. Charge a small amount on it every month and always pay on time.
  • You can apply for a credit-builder loan, available at credit unions. Your monthly payments are reported to the credit bureaus. The money you borrow is released to you once the loan is paid off.
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Amrita Jayakumar is a writer at NerdWallet. Email: ajayakumar@nerdwallet.com. Twitter: @ajbombay.

NerdWallet: 3 things millennials are getting wrong about Social Security

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This article is reprinted by permission from NerdWallet.

Few issues unite millennials like the future of Social Security. Overwhelmingly, they’re convinced it doesn’t have one.

A recent Transamerica survey found that 80% of millennials, defined in the survey as people born between 1979 and 2000, worry that Social Security won’t be around when they need it. That’s not surprising — for years, they’ve heard that Social Security is about to “run out of money.”

The language doesn’t match the reality. Social Security benefits come from two sources: taxes collected from current workers’ paychecks and a trust fund of specially issued U.S. Treasury securities. This trust fund is scheduled to be depleted in 2034, but the system will still collect hundreds of billions in payroll taxes and send out hundreds of billions in benefit checks. If Congress doesn’t intervene, the system can still pay 77% of projected benefits.

In any case, chances are good Congress will intervene, as it did in 1977 and 1983, to strengthen Social Security’s finances. Social Security is an enormously popular program with bipartisan support and influential lobbies, including the immensely powerful AARP, looking out for it.

Related: Want to get what you’re owed from Social Security? Do this

Still, millennials who believe Social Security won’t be there for them could make bad choices about their retirement savings. The worst outcome would be if they didn’t save at all, convinced retirement was hopeless. But any of the following myths could cause problems.

‘I can save enough to retire even without Social Security’

Good luck with that.

Currently, the average Social Security benefit is just under $1,500 a month. You would need to save $400,000 to generate a similar amount. (That’s assuming you use the financial planners’ “4% rule,” which recommends taking no more than 4% of the portfolio in the first year of retirement and adjusting it for inflation after that.)

And that may be underestimating the value of Social Security. The Urban Institute estimates that many average-income single adults retiring between 2015 and 2020 will receive about $500,000 in benefits from the system while couples will receive roughly $1 million. Millennials, meanwhile, are projected to receive twice as much: about $1 million for an average-income single adult and $2 million for a couple.

Also see: Should we be worried about Social Security going bankrupt?

Trying to save enough to replace 100% of your expected Social Security benefit might well be impossible, and could cause you to stint on other important goals such as saving for a child’s education or even having a little fun once in a while.

A more realistic yet still cautious approach would be to assume you’ll get 70% to 80% of what your Social Security statement projects, says Bill Meyer, founder of Social Security Solutions, a software tool for Social Security claiming strategies.

“Somewhere between a 20% to 30% reduction seems like the worst-case scenario to me,” Meyer says.

‘I can ignore my Social Security account’

Your future Social Security check will be based on your 35 highest-earning years. To get what you’re owed, however, your earnings need to be reported accurately and that doesn’t always happen. Employers may not report the correct information to Social Security, or may not report your earnings at all. You can correct those errors if you catch them in time. Fixes could be difficult decades from now, when the employer may have gone out of business and needed documents may be unavailable.

Millennials may be more exposed to errors than previous generations because they tend to change jobs more, Meyer says. That makes it important for them to check their earnings records, which they can do by creating an account on the Social Security Administration’s website.

“Every two to three years, you should log on and make sure that your earnings are reflected correctly,” Hayes says.

‘If it’s still around, I should grab it as soon as possible’

Millions of Americans make this mistake every year, locking in permanently reduced payments and potentially costing themselves up to $250,000 in lost benefits by claiming too early. But Congress is highly unlikely to cut benefits for those in retirement or close to retirement age, Meyer notes.

Instead, there likely will continue to be incentives for delaying your Social Security claim. Currently, benefits increase by about 7% to 8% for each year you wait to apply after age 62 until benefits max out at 70.

Read next: This hybrid Social Security plan could help more people save enough for retirement

Working an additional few years also can compensate for low- or no-earning years earlier in millennials’ careers, when incomes may have been depressed by recession or gig-to-gig work.

“A higher-earnings year can replace a lower one,” Meyer says. “You can fill in those gaps.”

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Liz Weston is a writer at NerdWallet. Email: lweston@nerdwallet.com. Twitter: @lizweston.

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