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Rekenthaler Report

Navigating the New Retirement World

Four keys to success.

Making Do With Less
A short essay by BlackRock's Robert Kapito in the 40th anniversary issue of the Journal of Portfolio Management, "Long Lives and New Strategies," summarizes the new retirement conundrum. As life spans have grown, expected asset-class returns have shrunk. The reverse, of course, would make for an easier investment task, although it would disappoint in other ways.

That people are living longer than in generations past is indisputable. That investment returns will be lower is not. However, modest bond yields, high stock-market price/earnings multiples, and the broad popularity of investing suggest that the easy money has already been made. Such is the overwhelming consensus of those who attempt to forecast asset returns. They might be wrong--but they are the way to bet.