The Pension Series (Part 20): Pensions, Volatility, and Risk

Pssssst

Hey! Over here. It’s me, Captain Obvious. I’m one of Grumpus Maximus’s many alter egos. Kind of like that guy from the movie Glass, but all good, no beasts. Don’t tell him, but I snagged the keyboard when he wasn’t looking. I wanted to let everyone know that stock market volatility is back. You already knew that? Of course you did, that’s why I’m called Captain Obvious. What you may not have noticed is that the volatility is spreading. It’s in the bond market now as well as the stock market. Even the U.S. housing market is starting to tremble in certain places.

I told GM that he should’ve written about volatility months ago, but he said too many Financial Independence (FI) bloggers were already writing about it. Plus, he hadn’t taken the time to determine if volatility posed any kind of risk to people’s pensions, or the pension funds that back them. I suspect he was just being lazy. Either that or too busy with his retirement plans to care about all three of his loyal readers. Well, I’m here to tell you that I finally convinced him to research the issue and write a post. Just remember that, when you leave your comments at the bottom of the page. Captain Obvious, out!

Continue reading →

The Military Retirement Process: Lessons Learned (Part 1)

Posted on 28-April-19 by Grumpus

For the Military Members in the Audience

When I first announced that I was officially retiring in 2019 via the blog and my Facebook group, the response was overwhelmingly positive. Amidst all those positive responses, Timika Downes, a fellow Financial Independence (FI) blogger, reservist, and FB group member asked me to share lessons I learned throughout the military retirement process. I was non-committal at the time because I had no idea if there would be anything worth sharing. However, now that I’m through the first phase of that process, I realize I have a few nuggets of information worth sharing — especially for military Financially Independent Retire Early (FIRE) seekers like me.

Admittedly some of my lessons are more or less relevant, based on what you want to do after the military. However, any military member contemplating either retirement or transition from Active Duty can take something away from what I’m about to share. Top among those takeaways is this: The Department of Defense (DOD); the Veteran’s Administration (VA); and many state, local, and benevolent organizations have put a lot of effort into ensuring that current active duty military members transition successfully to civilian life.

As a student of history, I’m well aware that the above takeaway was not always true. The VA, and the taxpayers who fund it, have failed to take care of U.S. vets on numerous occasions. As evidence, consider the string of VA scandals outlined by CNN in 2014. Continue reading →

Trade War Part Quatre: 3-to-9 Year Investment Mitigation Strategies

Posted on 16-August-18 by Grumpus

Last Call

This is the last article in my Trump Trade War series. In it, I address investment strategies to mitigate what I perceive as the worst potential effects of the Trump Trade War for investors on a three to nine-year investment horizon. This is by far the hardest time period for which to devise investment strategies due to the uncertainty surrounding the next potential recession and Bear Market. However, I felt I owed it to my readers who’ve stuck with this series thus far, and to those who also find themselves within this investing window. Continue reading →

Trade War Part Trois: Two and Ten-Year Investment Mitigation Strategies

Posted on 24-July-18 by Grumpus

Trump Trade War Investment Mitigation Strategies

No trademark long-winded Grumpus Maximus preamble for this article. However, since this is part three in a series about the Trump Trade War’s potential impact on your bottom line; I suggest you read parts one and two prior to reading this. You’ll need the context from the previous two articles for this post to make sense. In the second article, specifically, I explained Risk, Risk Tolerance, and Risk Capacity. I also laid out my investment philosophy. As you’ll see in the next few articles, I refer to Risk and my investment philosophy continuously.

Assuming everyone is up to speed, I suppose it’s time to talk Trump Trade War Investment Mitigation Strategies (T-TWIMS), right? Hang on while I run out and register the trademark on T-TWIMS … OK, I’m back! I’ll assume that’s a “yes” since you’re still reading. Well then, what’s your investing timeline or time horizon? In other words, when will you need the money? Continue reading →

Trade War Part Deux: Risk Mitigation

Posted on 19-July-18 by Grumpus

Trump’s Trade War

What’s the worst that could happen?

Hey! How’s it going? In my previous post on President Trump’s Trade War, and its potential to impact your wallet and retirement, I mentioned a future post where I would outline prudent risk mitigation measures an investor might take. Given the fact that the main front of the Trump Trade War kicked off for reals with China on 06 July 2018, it seemed appropriate to pen further articles now. I’ve seen nothing in the intervening days to change my gloomy outlook. In fact, I may have underestimated how bad this situation might get.

I’m getting ahead of myself though. For those of you who missed the first Trump Trade War article, you can find it here. In it, I outlined what I thought was a significant misunderstanding of macroeconomics and strategy (or is that strategery?) within the Trump administration. I showed how the steps they’ve taken on tariffs, free-trade, taxes, and immigration seemed specifically designed to make the next recession worse. I also opined that the administration’s actions may be hastening the onset of the next recession through inflationary pressures. While I bemoaned the idea of a three front trade war, two of which are against some of our closest allies and trading partners; I didn’t necessarily dismiss the need for action on China. Only the method. Continue reading →

The Trade War Will Not Be Televised …

Posted on 28-June-18 by Grumpus

… But, It Will Be Tweeted

Tariff by bloody tariff apparently.

Yes folks that’s right, despite all the talk of North Korean nukes, the Singapore summit, and “historic” de-nuclearization agreements reached (which were apparently the same as previous historic agreements); something far more sinister and much less subtle occurred recently — and I’m not talking about U.S. -sponsored human rights abuse committed along the U.S.-Mexico border either. No, I refer to the fact that U.S. President Donald Trump, and his team of economic advisors (and I use that term loosely), saw fit to consummate the trade war they’d been threatening since early 2018 … with the entire world!

Why the entire world Mr. President?

In the last weeks of late-May and first weeks of early-June 2018, President Trump canceled all country-based exceptions to the 25% steel and 10% aluminum tariffs he imposed earlier in 2018. This move angered long-time allies and trading partners around the world including our North American Free Trade (NAFTA) Partners Canada and Mexico; the European Union (EU); and other countries such as Brazil, Japan, and India. In retaliation, the EU enacted counter-tariffs on U.S. imports; prompting further tariffs threats from President Trump on European cars. The EU also lodged an official complaint to the World Trade Organization (WTO), and Harley Davidson announced it is transferring some production to Europe to avoid the tariffs on its motorcycles sold in Europe. Continue reading →