Comments on: Updating your Financial Game Plan for Low Interest Rates and Equity Returns https://evergreensmallbusiness.com/financial-game-plans-for-low-interest-rates/ Actionable Insights from Small Business CPAs Sun, 21 Feb 2021 08:56:18 +0000 hourly 1 https://wordpress.org/?v=6.9.4 By: The Sunday Best (2/21/2021) - Physician on FIRE https://evergreensmallbusiness.com/financial-game-plans-for-low-interest-rates/#comment-10535 Sun, 21 Feb 2021 08:56:18 +0000 http://evergreensmallbusiness.com/?p=12010#comment-10535 […] a statement assumes we’ll continue to enjoy excellent investment returns. Stephen Nelson of Evergreen Small Business thinks we should temper our expectations. Updating your Financial Game Plan for Low Interest Rates […]

]]> By: Stephen Nelson CPA https://evergreensmallbusiness.com/financial-game-plans-for-low-interest-rates/#comment-10534 Fri, 19 Feb 2021 19:01:27 +0000 http://evergreensmallbusiness.com/?p=12010#comment-10534 In reply to Doug Miller.

Good points, Doug. Thank you!

And something embedded in your remarks is worth highlighting: It’s a good idea for us to build portfolios that work in a variety of scenarios. I’m guessing part of the reason you have a cheap mortgage and have got a nice-sized allocation to TIPS is you’re planning ahead, thinking about and preparing for possible inflation.

Me too, for the record. I am allocating chunks to real estate, REITs, and TIPS. (I’m an acolyte of David Swensen’s and trying to follow this recipe for individual investors.)

]]> By: Doug Miller https://evergreensmallbusiness.com/financial-game-plans-for-low-interest-rates/#comment-10533 Fri, 19 Feb 2021 18:55:21 +0000 http://evergreensmallbusiness.com/?p=12010#comment-10533 I’ve been thinking about how to prepare should these guys be wrong. I saw a brief quote from Robert Rubin recently. He’s concerned about the groupthink at the Fed and among the Biden economic team. He believes planning on interest rates and inflation remaining low essentially forever is not wise, and provides some calculations on the effect on US debt service that would be caused by even a modest rise in interest rates. He also believes the Fed is overestimating its ability to control inflation, should it get rolling. So, I spend time thinking about the effect of inflation and rising interest rates on my current portfolio. Well, it’s bad for stocks and bonds. My house, with a large 2.3% fixed 3o yr, should be a nice asset for the kids to inherit. I’ve got a pretty good chunk that I’ll be needing in the next 5 to 10 yrs in TIPS, ultra short bond funds and cash. If interest rates tick up much at all, return on equity would probably go negative for a good while. Long bonds could lose significant value. I was drafted in 72, and after getting out, tried to start life and a family in the 70s. Remember Paul Volker? So, with every Kenyesian economist shouting Go Big!, government debt at unprecedented levels, Fed policy in uncharted waters, government stimulus at unprecedented levels, interest rates non existent, equity valuations at unprecedented levels, it might be a good time to ask what could go wrong and how can I be ready?

]]> By: Investing Blog Roundup: Remembering Dirk Cotton — Oblivious Investor https://evergreensmallbusiness.com/financial-game-plans-for-low-interest-rates/#comment-10532 Fri, 19 Feb 2021 13:00:51 +0000 http://evergreensmallbusiness.com/?p=12010#comment-10532 […] Updating your Financial Game Plan for Low Interest Rates and Equity Returns from Steve Nelson […]

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