It takes more to craft a perpertual retirement plan than it does to craft a 30-year retirement plan. But not as much more as you would intuitively think. Even those who don't deplete their portfolios each year probably should include some slack to cover the possibility that they live far longer than they expect. But the extra number of dollars needed to cover this possibility need not be a large sum if the plan does not call for diminishing the portfolio value each year.
"It takes more to craft a perpertual retirement plan than it does to craft a 30-year retirement plan. But not as much more as you would intuitively think. Even those who don't deplete their portfolios each year probably should include some slack to cover the possibility that they live far longer than they expect. But the extra number of dollars needed to cover this possibility need not be a large sum if the plan does not call for diminishing the portfolio value each year."I agree in general, but inflation is the threat that concerns me most, and longevity increases the exposure. I have been buying TIPs despite the current low coupon, but they are only a partial answer since my personal inflation rate may be weighted toward medical care. Also, I am somewhat concerned about manipulation of the CPI.
Vanguard's health care fund out performed for many
years but I think RTM is rearing its ugly head. I am
afraid that Gov regulation is going to suck the life
out of the health care industry. Many will argue that
more regulation rather than less is needed but
I say don't shoot the goose.
Cheers,
Charlie
Vanguard's health care fund out performed for many
years but I think RTM is rearing its ugly head. I am
afraid that Gov regulation is going to suck the life
out of the health care industry. Many will argue that
more regulation rather than less is needed but
I say don't shoot the goose.
Cheers,
Charlie
Even if drug prices get squeezed by regulation, there are still plenty of other sectors of healthcare that will do well. I think that anyine who owned shares of the health insurers in the past few years would tell you that it has been a good ride. There are also an increasing number of companies out there that make money by controlling costs. For example, one of my largest positions is PLMD. They do disease management for diabetics and COPD patients eligible for Medicare. It isn't hard for them to demonstrate that they have saved the program hundreds of millions of dollars, all the while making money for shareholders hand over fist.
Intercst, I know you have a big chunk of Pfizer. Do you think this is a good time to be buying drug stocks? What do you think is likely to happen in this market?