20 October 2018 FT — Articles to Read

20 October 2018


Question: According to MSN: Money, what are seven (7) ways to guarantee you’ll never have enough to retire?


China stocks head for steep decline – Pg. 1

–        While volatile in US equities has garnered most investor attention over the past two weeks, the declines in China have been steeper and extend a plunge that has sent the country’s main index down 22% this year

–        The sell-off, which also prompted a drop in the Chinese currency towards the Rmb7 level against the dollar, has been sparked by the trade war with Washington, a souring of sentiment on big tech and underlying concern over the health of the Chinese consumer


Trump property tax revamp stirs suburban ire – Pg. 2

–        The reform cut tax rates for corporations and individuals.  But it also capped at $10,000 the amount of state and local property tax that households can deduct from their federal income tax

–        96% of any tax cut resulting from repeal would go to the highest 20% of US households by income….the deduction is worth little to people who rent flats


Financial Markets – Pg. 7

–        BlackRock, the company he founded in 1988, was comfortably the biggest investment group on the plant, with more than $6tn of assets under management

–        …BlackRock celebrates its third decade, its vast money-gathering machine has begun to sputter, …

–        The company’s overall assets under management have also been buoyed by rising markets, hitting a record of $6.44tn in the third quarter…

–        …BlackRock’s shares have been pummeled this year.  After hitting a record $593.26 on January 22 – up more than 500% from their post-crisis nadir in March 2009 – its stock has tumbled over 30%

–        The US economic recovery has spurred the Federal Reserve into a series of interest rate rises since 2015, to ward off the danger of overheating.  That has echoed through bond markets, and pushed up short-term debt yields to levels not seen since before the financial crisis

–        …investors who have long complained about “Tina” – the idea that There is No Alternative (to buying equities) – now have some other options

–        Global growth is weakening, and while the US economy is red-hot at the moment, that has fanned fears that the Fed will have to keep raising interest rates – which could spell more strife for emerging markets in particular

–        The global asset management business is facing intensifying pressure from cheap, index-tracking funds, which have been sucked in hundreds of billions of dollars since the financial crisis and contributed to a broader reappraisal by investors of how much they should have to pay

–        The average cost of US bond and equity funds has slipped from 0.76% and 0.99% of the investment respectively in 2000 to 0.48% and 0.59% last year,….


#MeToo and the new work rules – L&A 1

–        80% of Americans now think that women not being believed is a problem, and two-thirds (64%) now say that in their workplace the victim is more likely than the accuser to be believed…

–        All this makes the reputational damage from a sexual harassment claim much steeper, which has changed companies’ risk assessments

–        As of May 2018, nearly 300 high-level US executives had been fired due to sexual improprieties

–        Companies now evidently believe that the reputational risk of not parting ways very publicly with sexual harassers is greater than the risk of a successful defamation suit

–        Four out of every 10 men (43%) now say that #MeToo has made them reflect on their own behavior…

–        Some simple guidance can help allay men’s fears…

–        First, if you want to date a colleague, feel free to ask her.  But if she says no, that’s your answer

–        The second rule is simple: treat male and female colleagues equally

–        The third rule concerns the widespread panic about whether a guy can give a girl a compliment…making someone uncomfortable, cease and desist…

–        The fourth rule concerns sexual joking

–        The final rule concerns touching.  Don’t do it!!!  (Prof Note: When I was in residential building, the touching was WAY over-the-top.  The sales people were the absolute worst!  As head of HR and CFO I had to deal with this.  I 100.0% believe that the touching was to solicit favours, e.g. needing something done, etc.  I also 100.0% believe these touches were occasionally misconstrued leading to my eventual involvement as HR.  Personally, I believe the solution to be bodycams on all employees. Now, how practical is that?!)


Answer: (1) Taking social security early; (2) Being too safe with your savings; (3) Banking too much on retirement calculators; (4) Failing to know what your fixed expenses will be in retirement; (5) Spending your savings on optional stuff; (6) Having no plan to cover income gaps; (7) Failing to keep your eye on the ball