Best business commentary

The DIY retirement portfolio

Folks are increasingly stashing their money in “ready-made investment mixes,” says Jonathan Clements in The Wall Street Journal. Vehicles like target-date funds are “smart” for many investors. But “there’s nothing like home cooking,” and “building your own fund portfolio” can be fun and rewarding. The first, and “key,” decision is how much to put in stocks versus “more conservative investments”—a good “starting point” is the “classic” balance of 60 percent stocks, 40 percent bonds. Then the recipe gets more complicated: foreign stocks, value funds, junk bonds, foreign real estate. And for a harbor from “turmoil,” stash 5 percent in “real” assets like gold-stock funds.

Redefining recession

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We’re “fixated” on whether or not we’re headed into a recession, says Robert Costanza in the Los Angeles Times, but really we’ve been stuck in a “quality-of-life recession” for 33 years. Our economic policy is geared toward growing GDP, but GDP isn’t “an appropriate gauge of our national well-being.” First of all, it is values-neutral—an increase in crime and pollution, an oil spill, and even “pestilence” can all boost GDP. Canada and Australia take well-being into account, and we can get an imperfect start with a ready-made gauge like the “Genuine Progress Indicator.” But the first step is admitting we have a problem and seeing that our focus on “GDP is blinding us to the way out.”