Best Asset Allocation For Retirees?

A December 2009 Financial Planning magazine article "Disappearing Act" from one of my favorite authors Dr. Craig L. Israelsen illustrates with back-testing how a Multi-Asset Portfolio equally weighted between large-cap domestic stocks, small-cap domestic stocks, foreign stocks, real estate, commodities, bonds, and cash has the best chance of surviving a 25-year retirement period at the highest withdrawal rates. The typical recommendation is to annually use 4-5% of your retirement nest egg with a 3% cost-of-living adjustment (COLA) increase per year, yet the Multi-Asset Portfolio survives a 7.5% withdrawal rate and almost survives a whopping 10% withdrawal rate! I think even a better portfolio construction would be to increase exposure to more foreign assets across all categories, particularly Emerging Markets. Also, the S&P GSCI used for the Commodities category is very skewed towards energy. I'd suggest using DJP or RJI for more diversity.

Another great chart from Bespoke.

Asset Class Cumulative Returns January 2008 - September 2009

This article highlights returns in various asset classes in the 2008-09 Bear Market. Perhaps a good starting point for Couch Potato investors rethinking their asset allocation? The Equally Weighted 16 Asset Class portfolio is, rebalanced monthly:
ML US Corporate & Government 1-3 Year
LB US Aggregate Bond TR
LB US Treasury Long TR
LB US Long Credit TR
LB US Corporate High Yield TR
Credit Suisse Leveraged Loan
JPM EMBI + Composite TR
JPM ELMI + Composite
ML Convertible Bonds All Qualities
LB Global Inflation Linked US TIPS TR
FTSE NAREIT All REITs TR
DJ AIG Commodity TR
S&P 500 TR
MSCI Emerging Markets TR
MSCI EAFE TR
Russell 2000 TR

A Retirement Portfolio Distribution Strategy

From Accumulation To Distribution is a good article in the May 2006 issue of Financial Planning Magazine by financial planner Harold Evensky specifically presenting a strategy for the distribution phase of retirement, that is when you're retired and now need to start using the money you've accumulated throughout your life. There seems to be too much emphasis placed on strategies for investing and wealth accumulation rather than distribution, and I feel really sorry for anyone having to retire last or this year because they're probably seriously hurting. In the article, his strategy outlasted a conventional balanced stocks/bonds portfolio as well as an all-bond portfolio during the stressful period of the early 1970s when stocks and bonds tanked (similar to our situation now except with monster inflation). I think it's more important now than ever to have a retirement plan in place, and a huge portion of that is a tactic for distributing your money.

Some HDTV Myths Dispelled

I'm a big fan of Mark Schubin because he's an undisputed historian of television technology and has a tongue-in-cheeky way of cutting through all of the clutter to focus on the most important aspects of whatever topic he's reporting on. In an October 2004 article in Digital TV Magazine High & Why, he mentions that the average American at the average American viewing distance of 9 feet can't see more than the 480 active lines in standard TV resolution on a 42-inch widescreen TV. He backs this up in a May 2005 article in Videography Magazine What IS HDTV Anyway, when he mentions a Consumer Reports study of plasma televisions that showed high-definition video content looking just as good on the best standard-definition TV sets as the HDTV sets! What makes HD look so "good" regardless of your TV set is that the design of HD cameras and lenses increases the human perception of "sharpness" based on having more contrast over the range of detail resolution. Note that at typical PC monitor distances (3 feet or so), HD resolutions do make a perceivable difference though. He goes on to say that in psychovisual studies, the perceived resolution of 1080i is about the same as 720p. Also in an August 2005 Television Broadcast Magazine article Cameron Diaz Looks Fine On HDTV, he says that the 1953 NTSC color standard actually offers a greater range of reds (0.67x/0.33y) than HDTVs (0.64x/0.33y). Finally, in that same article, he talks about tests performed by CBS in movie theaters, where projector mechanical jitter and weave reduced the perceived resolution down to just 875 lines in a Hollywood auditorium. Great stuff.

Best Pro-Audio Cables Are Twisted-Pair With A Combined Foil-and-Braid Shield

Mary Gruszka concluded in a June 22, 2005 TV Technology Magazine article called Audio Interconnections Make a Difference that the pro-audio cable to use for "best" noise rejection is twisted-pair with a combined foil-and-braid shield, based largely on research by Jim Brown and Neil Muncy of AES. But there's a catch: does anybody make such a cable?

Properly Connecting Balanced And Unbalanced Audio Equipment

I consider Bill Whitlock at Jensen Transformers one of the experts on proper analog audio interface design. He published a great article in the March 2002 edition of Sound & Video Contractor Magazine on proper audio gear connectivity, a subject matter I find still eludes many audio professionals today, entitled Mix-And-Match Intefaces. There's also some additional feedback on this article here where Mr. Whitlock goes into more depth on a reader's questions. He's got plenty of write-ups on correct grounding, shielding, and hum removal of audio systems.

Which multimedia player most accurately downmixes 5.1 to stereo?

Since I work with 5.1 mixes that are frequently played back in stereo on a PC, I decided to do some informal testing to see which multimedia player most accurately adheres to Dolby's default method of 5.1 to stereo downmixing, which is:

Lo = L - (3dB)C - (3dB)Ls + noLFE

Ro is a mirror image of Lo.

Here's what I found in my informal tests:

Windows Media Player: Lo = L - (3dB)C + Ls + (5.5dB)LFE

VideoLAN VLC Player: Lo = L + (6.1dB)C - (3.6dB)Ls + noLFE

Foobar2000 with "Convert 5.1 to stereo" DSP activated: Lo = L - (3dB)C - (3dB)Ls + LFE

Apple QuickTime Player Lo = L - (3dB)C - (3dB)Ls + noLFE

It appears QuickTime Player is our winner! Foobar2000 with its "Convert 5.1 to stereo" DSP activated comes in second place, and is good if you must listen to the LFE channel. The surprising one was VLC Player, which is just way off. I keep wondering if I screwed up the test with this popular player, or perhaps there's a setting somewhere I missed. Now, if QuickTime Player only launched faster...

Investment Pains Good For Diversification?

An article in the Wall Street Journal (link on Yahoo! Finance) titled Failure of a Fail-Safe Strategy Sends Investors Scrambling by Tom Lauricella (7/10/2009) makes in interesting point about why investment asset classes that were traditionally considered non-correlated now move in tandem:

"Prior to this decade, investing in commodities was a complicated process due to the complexity of the futures markets."

ETF's and ETN's now make difficult-to-invest-in assets easy. So perhaps the takeaway is that asset classes like commodities were great portfolio diversifiers because they were hard to invest in. So... what's left that's still a pain to invest in?

J.J. Abrams on sound and music for "Star Trek"

The June 2009 edition of Post Magazine has a good interview with J.J. Abrams, with yet another directorial mention on how great sound and music positively influences the look of a movie. Apparently, Abrams didn't like the initial mix and brought in legendary Star Wars Sound Designer Ben Burtt for help. Burtt went the minimalist route and stripped away a ton of audio he deemed unnecessary and made what remained clear and impactful. Sounds like he went too far as Abrams mentions a subsequent mix pass where lots of Michael Giacchino's music is added back in and sound effects taking a secondary role. It's interesting he mentions this because I've often felt that the initial big battle scene in Episode II and even scenes in Wall-E, two other Burtt helmers, sounded a bit sparse for my taste. Don't get me wrong though -- Burtt's still considered the undisputed number one Sound Designer in the world!