Social Security Update: Statements Resumed

Social Security Administration Resumes Statements for Those 60 and Older

Effective February 15, 2012, the Social Security Administration resumed mailing paper Social Security Statements to individuals who are age 60 and above. You remain unable to request statements online or over the phone.

As a reminder, you can visit the "Retirement Estimator" at the Social Security Administration website to view your estimated retirement benefits. If you would like to audit your earnings history, reach out to the Social Security Administration and request an SEQY (Summary Earnings Query).

Beating the Market: How Are We Doing?

Three items for your consideration (as Rod Stering used to say):

First, a Morningstar review of the fund managers proposing to “beat” the market through complex hedge fund like strategies, complex macro trend modeling and/or a degree of gut instinct they hope will tell them when to buy and when to sell different asset classes and derivatives en mass. The result is supposed to be either superior returns at the same volatility as the overall market, or lower volatility with the same returns as the market. So how did these 100+ fund managers do?

As a point of reference please check out the February/March 2012 issue of Morningstar Advisor magazine.

So what is going on here? After spending many millions of dollars collectively on research, these investment professionals entrusted with  billions of dollars, had collectively underperformed a basic Moderately Aggressive portfolio by the vary measures they had proposed they would beat it.

Might I suggest two additional pieces to ponder:

First, the story of the Norden Bomb Sight as presented at TED by Malcolm Gladwell. This is a must see in a much broader sense as it relates to the folly of human hubris. It matches well with the TED talk by Katheryn Schultz on “Being Wrong”. While unsettling, very important to consider. Guess this is part of the reason I am known among my family and friends as “The Buzz Kill”

Secondly, the following diagram, which is so much the more obvious in light of the above two pieces. Often it is very challenging to believe that, even though we can see how the hubris of others caused them to make such obvious but painful mistakes, it is almost inconceivable that we would be the victim of this self inflicted malady.

If we can embrace the notion that the zone “Things That Matter” within the zone of “Things you can control” is very small, we best not waste too much of our time with the rest of the stuff in the “Things you can control” universe.

Knowledge: the Timeless Investment

The Internet appears to be doing just what was promised to us for TV in the age of Sputnick - an unleashing of educational content for all. Evidence of this is overwhelming and I want to share three such sites that are among the standouts:  

• MIT Open Courseware: these are taped courses from various MIT lectures - the real deal content that one might need a 4.7 highschool GPA, 1500 SATs, and a cool $50,000 a year to see live. 

• Khan Academy: a more home grown variety featuring over 2000 short talks (mini lectures) given by ex hedge fund analyst and MIT double major graduate turned education rock star Salman Khan. This free access site with its lectures and work problems for those wishing to test their learning of the materials is one of the vanguard tools for education reform. Also see the TED presentation by Salman Khan.

• TED Talks are a web collection of many of the talks given over the years at TED conferences. TED stands for Technology Education and Design, and the conference brings together some of the most interesting (and some very unusual) speakers and concepts in these areas. Each typically 12-18 minutes long.

I welcome your comments on additional sites where great education and information sharing such as this is being offered.

Health Care Spending and average Outcome by Country

I suppose that it would be one thing to spend the most per person here in the US if we got the overall best outcomes. Unfortunately, numerous factors contribute to this not being the case in the US as compared to virtually all other countries in the developed and many in the emerging world.

As we look to help clients finance health care costs we are ever aware of both the costs (estimated) and the fear factor of costs. The Organization for Economic Co-operation and Development (OECD) has extensive Global health care and cost data (from which the below NGM chart was constructed) in their OECD Health Data 2011 study