Review of You've Lost It, Now What? How to Beat the Bear Market and Still Retire on Time (Hardcover)

Investors contemplating retirement, but stunned by losses sustained in the extended bear market that began in the spring of 2000, will find hope and encouragement in Wall Street Journal columnist Jonathan Clements' "Now What?". This is a do-it-for-yourself repair strategy for baby boomers with badly damaged bubble portfolios. First, face facts, we are told: You've got a "bone-head" portfolio, and it's not likely to come back in value, so sell your losers. Forget the "foolish beat-the-market fantasy" promoted by Wall Street's brokerage houses and money management firms. Invest to capture market returns with stock index funds. Diversify with stocks, bonds, and real estate. Specifically, you should own large and small US stocks and foreign stocks. For the bond portion of your portfolio, use inflation indexed treasuries and short-term corporate funds, and to boost your income, consider high yield bond mutual funds. Clements recognizes that "this will be the decade of the dividend and interest payment". So, REITS (real estate income trusts) with their high, single-digit returns, should represent 10-15% of your portfolio. In all this, Jonathan Clements is in good company: W. Bernstein, C. Ellis, B. Malkiel, L.Swedroe, B. Schultheis, et.al., have recently written (or updated) books with similar conclusions. Clements' contribution is in the timeliness of his insistence that boomers can salvage their own retirement plans by acting to keep investment costs in check, diversifying, and saving "like crazy". Indeed, the investment process should be simple to follow. "Why are we such sluts for sophistication?" Clements asks with exasperation. Readers may be skeptical that a fifty-year old, in an example, who hasn't saved a "nickel" for retirement can accomplish much by age sixty-five. But this late starting investor is not the book's primary focus. 'Gilding the Golden Years' (Chapter 7) is one of the author's better chapters. Investing may be "simple", but it is also an art, so this frequently quoted columnist's portfolio advice is of value. Clements is clearly intrigued by a strategy of establishing multiple sources of investment income during retirement. In addition to income from social security, 401k-style plans, pensions, and humbled securities portfolios, investors might consider an immediate annuity, a reverse mortgage, or even part-time work. After all, if it's true that investors should take no more than five percent of their investment assets each year for income, working part-time to earn five thousand dollars is like having another hundred thousand dollars in retirment assets. And an unconventional idea like a reverse mortgage may take on a new practicality for today's generation of soon-to-be retired. Investors paralyzed by their recent bear market experience will find sound, helpful advice in this book.



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