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Investing Blog Roundup: Less Time Working, More Deep Work

This week I enjoyed two articles discussing workplace experiments about how different changes to the workday (or workweek) affect productivity.

At least for me, whether it’s writing, research, or coding, I cannot come remotely close to cranking out 8 consecutive hours of productivity with only a brief break for lunch (at least not on a regular basis). I tend toward starting work early, getting in a few hours of really good work, then taking a long break doing something completely different — riding my bike, climbing at the gym, or walking around the neighborhood or our local Botanical Garden. Then I have another few good hours in me, and that’s it.

Other Recommended Reading

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Investing Blog Roundup: The Best Predictor of Stock-Fund Performance

Morningstar’s John Rekenthaler recently wrapped up a three-part series about a piece of research that found a metric for selecting mutual funds that has considerably better predictive value than simply picking funds with low expense ratios. I would encourage you to read the series in its entirety though. The first two articles are interesting, but the real lessons come in the final article.

Other Recommended Reading

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Investing Blog Roundup: Finding Good Financial Advice, at a Fair Price

How do I find a financial advisor? How much should financial planning services cost? How do I evaluate financial advisor candidates?

These and other similar questions come up a lot in my email inbox.

Jim Dahle recently provided a balanced take on the topic of finding/evaluating an advisor.

From the article:

“The rule of thumb is that high-quality financial advice costs a four-figure amount per year, ie, between $1,000 and $10,000. If you are paying more than $10,000 per year, you can almost surely get the same (or better) advice and service for less money. If you are paying less than $1,000 per year, you are unlikely to actually be receiving high-quality, personalized advice.”

I’ve never heard such a rule of thumb before, but I think it’s pretty good — not perfect, but helpful in most cases.

Other Recommended Reading

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Investing Blog Roundup: Problematic Probability of Ruin

There are plenty of ways to evaluate a retirement plan. (For instance, here’s a paper from Wade Pfau, Joe Tomlinson, and Steve Vernon discussing 8 different metrics for evaluating retirement spending/portfolio strategies.) By far the most common though is “probability of running out of money.”

But as Dirk Cotton discusses in a recent article, that metric leaves out a ton of useful information. In addition, it’s questionable how accurate such a metric can be, for any strategy that includes stocks.

Other Recommended Reading

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Investing Blog Roundup: Interest Rates and Social Security

From time to time I receive emails from people using the Open Social Security calculator who want to know: why is it giving me a different answer than it gave me last time I ran it?

The answer (unless you’re changing inputs on your own) is usually interest rates. By default, the calculator automatically pulls in the yield on 20-year TIPS to use as the discount rate. And that yield changes over time. For instance it was 1.07% at the beginning of this year, fell to as low as 0.07% in August, and is now back up to 0.41% as of this writing.

Point being: claiming Social Security early (in order to keep a larger portion of your portfolio invested) becomes more/less attractive as interest rates rise/fall. For those who wish to experiment with this input in the calculator, you can check the box for “advanced options” at the top of the page and adjust the discount rate for yourself to see how the output changes.

Recommended Reading

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Investing Blog Roundup — Wellness: What Actually Works

My favorite read this week was not directly finance-related at all. Rather, it’s just a brief, research-founded discussion of things that we know work to improve wellbeing in various parts of your life (physical health, mental health, work-life, etc.). As with the best personal finance advice, it’s generally pretty simple stuff.

Other Recommended Reading

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My new Social Security calculator: Open Social Security