Josh Stern

Think Carefully Before Macro Hedging Your Life/Work/Oil Exposures

Financial planners for the middle class are becoming increasingly sensible for several reasons: 1) increased life expectancy and duration of post-retirement years, 2) increased range of cost effective uncorrelated investment options (not just about stock vs. bond allocation anymore), 3) lots of research showing the relative importance of saving habits vs. income level in determining retirement wealth, and 4) central bank policies emphasizing low inflation as well as recent home price increases decrease the significance of residential real estate as an implicit equity investment hedge. I didn't read Shiller's article, but the advice you mention does at least make sense as part of some financial planner's recommendations.