Dr. Robert Shiller, the renowned Yale professor and creator of the S&P Case-Shiller Housing Index, recently made several dire announcements about the short-term and long-term prospects for the housing market. Asked for his prediction on housing prices in a recent interview, Dr. Shiller reported that prices might fall another 10% to 25% in the next few years. (Shiller also acknowledges that forecasting the direction of the housing market is as hard as predicting the weather and that we are in uncharted territory on a range of fronts.)
The Housing Market: A History of Poor Performance
Let’s set aside the short-term housing predictions and focus on long-term issues.
Dr. Shiller analyzed the financial benefits of home ownership from an investor’s point of view. His research found that housing prices did not outperform Continue reading →
The Employee Benefit Research Institute (EBRI) is out with its annual review of the nation’s 401(k)s and gives us something to be thankful for: a number of positive trends in the nation’s greatest trove of personal savings. (Social Security, that’s another story.) Continue reading →
Vanguard founder and investing icon John Bogle doesn’t believe we’re in a bond bubble, but he does think bonds will produce only modest returns for quite some time. Still he says investors generally belong in the conventional stock and bond markets — not reaching into more exotic categories for yield.
In this interview (video below) with Morningstar at the recently concluded Bogleheads reunion outside Philadelphia, he runs through a common sense approach to estimating what kind of yields investors can expect over the next five to ten years from those conventional categories. Continue reading →