Our mission: the Brandes Institute investigates potential opportunities arising from the influence of behavioral and structural factors on global investing.  

Boomers Behaving Badly: A Better Solution to the Money-Death Problem (January 2012)

The biggest single financial worry for American workers may be “money death,” the fear that they will run out of money during retirement. Americans within 10 years of retirement number 60 million and are forecast to grow to more than 75 million within the next decade. Investment strategies for retirement rooted in conventional wisdom or extrapolated from successful past approaches may no longer be ideal for healthy and wealthy Boomers. Supported by a proprietary modeling tool—the Brandes Retirement Simulator—we are able to estimate wealth outcomes based on personalized financial and lifestyle inputs. The results suggest that the baby-boomer generation should consider contrarian strategies, including equities and fixed income assets with higher-return potential to address the “money death” problem.

Please click on the links below to view the video, research summary or to use our online retirement simulator. You can also click on the link above to read the original research paper.

Brandes Institute Research on NBC: Barry Gillman of the Brandes Institute was recently interviewed by Sharon Epperson, CNBC Personal Finance Correspondent.

Brandes Retirement Simulator: The Simulator allows users to model future income, expenses and investment strategy and simulate a range of possible financial outcomes up to age 100. The Real Age Calculator used in the Simulator may allow users to make a more accurate estimate of their own future life expectancy.

What people are saying about Boomers Behaving Badly: "... for many investors approaching their retirement years, Brandes lays out a more optimistic path that relies on moving away from conventional retirement strategies in favor of a more aggressive approach." - U.S. News & World Report "This alternative counter-intuitive investment strategy can help keep retirees from running out of money before they die...." - Financial Advisor "A fascinating new research paper...." - Investment News

Other Recent Research Projects:

Broad is the New Narrow: How Passive Investing Creates Concentrated Portfolios (April 2012)
Passive investing, particularly in emerging markets, has become an increasingly popular means of quick, “diversified” exposure to a particular segment of the markets. Defensive investors, as Benjamin Graham noted, would be best served owning a diversified list of leading companies. Yet it’s the presumption of diversification that can lead investors astray. Many passive investments are, in fact, extremely concentrated owing to the disproportionate size of its largest holdings and blindly weighting by market capitalization. With emerging markets now the largest region of the equity markets by number of investable securities, they offer opportunities for investors willing and able to invest actively outside of the largest securities.

Volatility: Implications for Value and Glamour Stocks (November 2011)
What happens to value and growth stocks when investing after extreme volatility?

In this study, we introduce the context of market volatility for value and glamour stock returns. Tracking returns for style indices after periods of extreme volatility, we reveal evidence showing value stocks typically outperformed growth stocks and did so with less variability immediately after periods of high and low volatility from 1980 – 2011.  This paper adds to previous literature by providing another angle for value investing as a potentially successful long-term strategy.[EXECUTIVE SUMMARY]