Daniel de Visé’s Post

Common wisdom dictates that as we steer our savings toward retirement, we should gradually bulk up on bonds. Bonds are supposed to be safe, predictable, boring: the perfect antidote to mercurial stocks. Lately, though, bonds have felt anything but safe. Between August 2020 and October 2022, a benchmark Bloomberg bond index plunged 18%. Even now, the index remains roughly 10% below that 2020 high. The bond bloodbath has prompted some investors to question whether it is time to rewrite the rules of retirement saving. “It’s been a rough -- really, a rough 10 years,” said Ashley Folkes, CFP®, CPWA®, CRPC®, RICP®, CEPA, a certified financial planner in Birmingham, Alabama. Also featuring Jonathan Lee, CFA, CAIA, CFP® of U.S. Bank, Maria Bruno of Vanguard, Ted Haley, CFP®, AIF®, Todd Jablonski of Principal Asset Management, Keith Singer CFP -- and a breathtaking photo gallery of Jerome Powell through the years.

Homes sold below their list price at the peak of the housing season, Redfin reports, a development that could shift the real estate market to the buyer’s advantage. The typical home that sold during a four-week span in May and June went for 0.3% less than its asking price, according to the real estate brokerage Redfin. That data point matters, housing experts say, because the market hits its annual peak in late spring and early summer. In the last few years, the average home sold at or above list price at that time of year. This year, it did not. “It means that the housing market is starting to move to the buyer’s favor,” said Daryl Fairweather, PhD, chief economist at Redfin. Also featuring Ryan Sypek of Compass, Danielle Hale of Realtor.com, Jessica Clegg of NEXT NEST and Michael Maerten of Tri-County Board of REALTORS®.

A good credit score can save you as much as $10,000 on a car. A bad score can cost you that much. Your credit score largely determines how much interest you pay on a car loan. And interest rates are running high. The average new car loan was $40,366 in 2023. But the total cost of the loan can range from $46,419 to $57,339, depending on the interest rate, according to an analysis by the personal finance site MarketWatch Guides. The average used car loan was $26,685. Factor in the interest, though, and the total cost of that loan ranges from $32,205 to $43,812. Interest rates on car loans are as high as they’ve been in years. The average rate on a new car ranges from 5.4%, for those with the highest credit scores, to 15.6%, for those with the weakest credit, according to Experian. For used cars, the average interest rate ranges from 6.8% to a whopping 21.6%, depending on your credit score. Featuring Kimberly Palmer of NerdWallet, Brian Moody of Cox Automotive Inc., Lisa L. Gill of Consumer Reports and David Straughan of MarketWatch.

Some armchair investors would like to see Donald Trump steering the economy. Others prefer Joe Biden. But if there’s one thing all investors eschew, it’s uncertainty. And nothing says uncertainty quite like the 2024 election. Betterment, the financial advisory company, recently surveyed 1,200 investors, asking what word best conveyed their feelings about the upcoming election. The most popular response: “Anxious.” Another survey, from the asset management firm Janus Henderson, found 78% of affluent investors voicing concern about the election. A third poll, from the Nationwide Retirement Institute, found 76% of investors on edge. Election anxiety weighs heavy on American investors. You want uncertainty? Many in the president’s own party are calling on him to exit the race. The other party’s presumptive nominee is running as a convicted felon. Featuring Liz Windisch, CFP®, Catherine Valega, Justin Samples CRPC™, AWMA℠ of Ameriprise Financial Services, LLC, & Laura Mattia, Ph.D., MBA, CFP®

Summer vacation lasts 11 weeks for the Restrepos. And the Michigan family has nine of them covered, thanks to a Kids Club program offered by the local public schools. But summer camp is not free. The Restrepos are paying $225 per kid per week: $4,050 for both children for those nine weeks. “Honestly, I don’t know what we’d do without it,” William Restrepo said. The price of parenting tends to spike in summer, when tax-funded public education gives way to parent-funded daycare and sleepaway camps. Inflation pads the bill. What is a parent to do? Featuring Matt Schulz of LendingTree, Courtney Alev of Credit Karma, Andy Cooper of CouponBirds, and data from ParentsTogether Foundation.

What if every employee in America were automatically enrolled in an Individual Retirement Account? In an ongoing study, researchers from Princeton University and the Treasury Department have analyzed just such a scenario. Their conclusion: Not surprisingly, a national retirement savings plan would substantially raise the nation’s savings rate, especially for low-income workers. If every worker were automatically enrolled in a retirement plan, the savings rate among low-income workers would double, from 21% to 40%. Because fewer lower-income Americans save for retirement, a national savings plan could offer a potential solution to that challenge. Featuring Motohiro Yogo of Princeton Economics, Catherine Collinson of Transamerica Institute, Angela Antonelli of Georgetown University McCourt School of Public Policy, and Spencer Williams of Retirement Clearinghouse.

A new survey explores an odd subgroup of American employees: Workers who aren’t enrolled in a 401(k), but who think they are. In a Retirement Security Survey, released this month, Principal Financial Group found that nearly six in 10 non-savers, 59%, wrongly believed they were contributing to a 401(k) retirement plan. The survey of non-savers reached 1,110 workers of various ages, races and incomes, linked by a common trait: None of them participated in a 401(k) offered by their employer. Asked how much they were saving, most of the non-savers gave surprisingly specific figures: They were setting aside 5%, or 8%, or 10% of their income in a 401(k). Some workers said they were saving more than that. Not surprisingly, the finding suggests that some of those workers will have a hard time reaching their retirement savings goals. Featuring Chris Littlefield of Principal Financial Group, Anqi Chen of Center for Retirement Research at Boston College, Kai Walker of Bank of America and Sophoan Prak of Vanguard.

You borrowed money when you bought your home. Now you’re borrowing more money to fix it up. Is that a good idea? One in five homeowners has taken on debt to cover maintenance and other “hidden costs” of homeownership, according to a recent survey from Bankrate, the personal finance site. “The one inevitability of homeownership is that there will be unplanned expenses,” said Greg McBride, CFA, chief financial analyst at Bankrate. Those expenses seem to be rising. Another Bankrate survey found that the average house now costs $18,000 a year to own and maintain, on top of mortgage payments. The tab includes property taxes, insurance, repairs and utilities, and the tab has risen by one-quarter since 2020. Another study, from the online platform Thumbtack, found that average annual maintenance costs, alone, rose about 8% last year, from $6,155 to $6,663. Homeowners should expect hidden costs to rise further, and not just because of inflation. Also featuring Rodney Williams of SoLo Funds.

Any time you buy two of something and get a third one for half off, or add a few dollars to an online order to secure free shipping, you are “spaving.” Spaving is a mashup of “spending” and “saving”: spending more to trigger savings. But don’t fool yourself, experts say: Spaving is mostly spending. “It’s always more spending. It’s not always more saving,” said Jeff Galak, an associate professor of marketing at the Tepper School of Business at Carnegie Mellon University in Pittsburgh. Spaving has been in the news lately. It sounds like something new: The term has seldom appeared in this publication. It isn’t in the online Merriam-Webster dictionary. Type it into your word processor and watch your spellchecker erupt in protest. Featuring Jeff Galak of Carnegie Mellon University - Tepper School of Business, Kimberly Palmer of NerdWallet, Cassandra Happe of WalletHub, Kris Yamano of Crewe Advisors and Jack Howard of Ally Financial Group.