http://www.marketwatch.com/story/retirement-savers-its-not-too-late-for-stocks-2013-06-22
The real meat and potatoes:
To be sure, investors are facing a world of low returns and higher than average volatility. And the traditional advice is to focus on diversification and risk management. But that’s not all they should focus on. “My advice is to focus on taxes, fees and liquidity,” said Wesley Gray, a professor at Drexel University.
After tax example:
Take, for instance, a 10% expected return asset that generates 100% income. In California the after tax is less than 5%. “Perhaps an asset generating deferrals and long-term gains makes more sense,” Gray said.
After fee example:
With respect to fees, Gray asked the following: Does it make sense to buy an active bond fund at 50 basis points (one-half of 1%) when yields are 2% to 3%? Instead, Gray recommends using low-cost providers of mutual funds. “Hire Vanguard at approximately 0 basis points,” said Gray.
Liquidity example:
As for liquidity, Gray recommends that retirees stay away from “exciting” asset classes charging high fees and that require lockups. “The last thing a retiree needs is a hedge fund or private equity investment that sucks fees and denies someone access to their hard-earned wealth,” Gray said.
About the Author: Wesley Gray, PhD
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