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Investing Blog Roundup: Schwab “Intelligent Portfolios” Suddenly Less Exciting

For several months now, Schwab has been promoting their upcoming “Intelligent Portfolios” platform, which will offer automated rebalancing and tax-loss harvesting of a portfolio of ETFs. The big selling point is that there is no fee for the service, aside from the cost of the funds held in the portfolio.

Frankly, an automatically rebalanced portfolio of Schwab’s super low-cost ETFs sounds pretty darned neat to me. For lazy investors such as myself, such a thing could even be preferable to a low-cost Target Retirement or LifeStrategy fund from Vanguard.

Unfortunately, now that Schwab has released additional information, we can see that the service isn’t going to be nearly as exciting as it could have been. You don’t get to choose the portfolio. Schwab assesses your risk tolerance and puts you into one of a few portfolios that they’ve created. And those portfolios have (what I consider to be) two drawbacks:

  1. They include some higher-cost ETFs, and
  2. They include a mandatory cash holding (which will earn almost nothing).

The Finance Buff has more information:

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Investing Blog Roundup: Staying Flexible with Retirement Withdrawals

There are many personal finance rules of thumb that can be helpful when developing a rough-draft retirement plan. However, as Darrow Kirkpatrick and Christine Benz remind us this week, following a given rule of thumb may not be the best approach. Kirkpatrick addresses the question of how much to spend per year, while Benz looks at which account(s) to spend from each year.

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Investing Blog Roundup: Nominating Jack Bogle for the Presidential Medal of Freedom

The Presidential Medal of Freedom is the highest civilian award given by the U.S. government. The idea is to recognize people who have made “especially meritorious contributions to the security or national interests of the United States, world peace, cultural or other significant public or private endeavors.” In the fields of economics/business, for instance, the award has been given to many people, including Warren Buffett, Daniel Kahneman, Sam Walton, and Milton Friedman.

This week, Phil DeMuth of Forbes made the case that John Bogle should be a candidate for such an award. Not only did Bogle create the first retail index fund, he created a financial services company that, by its structure, puts client interests first — because clients are essentially the shareholders.

Demuth writes:

“An American success story, Bogle inevitably became a millionaire. Here’s what his sacrifice meant he didn’t become: a multi-billionaire.  Bogle doesn’t own a private jet; he flies coach. It’s unlikely that you will read about future generations of Bogles becoming U.S. Senators or owning professional sports franchises. That money went into your pocket instead.”

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Investing Blog Roundup: Learning about Estate Planning

Estate planning is not one of my primary areas of expertise, which is why I don’t discuss it on the blog very often. In the hope of being able to be more helpful to you folks though, I’ve been starting to develop my knowledge of estate planning topics (via continuing education courses and otherwise). If you have any related topics you’d like to see addressed in a future article, please let me know, as it will help me to direct my research.

On a related note, this week, Michelle Perry Higgins gives an excellent reminder for investors with trusts: Don’t forget to fund them!

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Investing Blog Roundup: Missing Out on Subsidized Insurance

This week, the Kaiser Family Foundation released the results of a survey showing that, of the approximately 30 million adults in the U.S. who remain without health insurance, 48% would qualify for assistance purchasing such insurance (either tax credits or Medicaid). If you (or somebody you care about) doesn’t have health insurance, it’s worth taking the time to learn how such subsidies work, so that you don’t miss out.

You can read more about the survey and its other findings here:

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Investing Blog Roundup: Taking Winnings Off the Table

There’s no reliable way to know when the next market downturn is coming. For those of us who are still many years from retirement, that shouldn’t be a scary thought, given that a market downturn simply allows us to buy shares at lower prices. But, as Bill Bernstein reminds us this week, a market downturn can be a big problem if you’ve just retired, if your portfolio isn’t prepared for such an event.

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