The Cordant Blog

Isaac Presley, CFA

Isaac Presley, CFA

Isaac Presley is Director of Investments for Cordant, a wealth management firm serving current and former Intel employees. To learn more, you can read Isaac's full bio.
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Recent Posts

Retiring from Intel: Calculating Years of Service, Determining Retirement Eligibility and the Benefits of Being an Intel Retiree (Part 2)

by Isaac Presley, CFA on May 26, 2017

Last time we looked at how to calculate years of service at Intel and the different ways to qualify as an “official Intel retiree.” In part two, we get to the good part as we’ll review the benefits of retiring from Intel. Additionally, we’ll introduce the “Intel Retirement Benefits Calculator” (a free downloadable Excel tool) that will assist you in calculating your years of service and outline what it means for your retirement benefits.

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Retiring from Intel: Calculating Years of Service, Determining Retirement Eligibility and the Benefits of Being an Intel Retiree (Part 1)

by Isaac Presley, CFA on May 17, 2017

Not everyone leaving Intel, even if it’s their last job, officially retires from Intel. The company has very specific retirement eligibility rules and subsequent benefits accruing to official retirees. And, as with all Intel benefit plans, these benefits can be enormously valuable but are often complex and difficult to determine how they apply to your specific situation.

We help our clients in defining their benefits and then applying them to their individual situation as part of our retirement planning process, but here we want to lay out this part of the Intel retirement process for everyone. This series will attempt to do three things: Review when someone qualifies to officially retire from Intel; Illustrate how years of service at Intel are calculated, and then, in part two we will review the benefits accruing to Intel retirees.

As Intel’s 2017 Pay, Stock and Benefits Handbook (hereafter, simply the 2017 Handbook) states, Understanding the retirement eligibility rules and how your retirement benefits work is essential to maximize the value these benefits offer.”

Let’s take a look.

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How to Stress Test Your Financial Plan: A Look at the Key Variables

by Isaac Presley, CFA on May 12, 2017

As any engineer can tell you, sensitivity and stress testing are important tools in determining how a system can fail and therefore, determining the safe usage for that system. When it comes to your financial life, it should be no different. Stress testing your financial plan is an important exercise in determining the health of your wealth. While this a natural inclination for engineers, it can be unclear where to start. Let’s look at the key variables and the imact they have on a financial plan.

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Five Myths About Landing a Good Job Later in Life [Infographic]

by Isaac Presley, CFA on April 25, 2017

Next week we will be hosting a webinar titled Accelerate Your Journey to Financial Independence where we expand on recent blog topic that proved to be quite popular (see How To Reduce Your Target Number and Retire Earlier). In the webinar, we'll look at the tremendous value of using supplemental income in retirement to create a shorter path to achieving financial independence.

With baby boomers more healthy and living longer than ever before, these "encore" or second careers are becoming increasingly common. In fact, a 65-year-old can now expect a lifespan of nearly twenty additional years—over five years longer than a 65-year-old in 1950.

These increases in health coupled with the shifts in the U.S. economy to service work and white color jobs and away from manufacturing jobs add up to an attractive opportunity for anyone nearing the traditional retirement age to bring in some supplemental income and, ultimately, get to financial independence earlier. Consider that:

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Margin Debt Hits All-Time High, or Does It?

by Isaac Presley, CFA on April 13, 2017

If it bleeds, it leads. ~Joe Loder in Nightcrawler

Margin debt recently hit an all-time high—$528 billion as of February month end. But, by another measure, margin debt divided by underlying assets, it’s actually at a lower level than it was in February 2009—the start of the market recovery from the global financial crises.

So, how concerned should you be about margin debt? What does it tell us about the market going forward and how much attention should you pay to these attention-grabbing headlines?

In the 2014 film Nightcrawler, Lou Bloom (played by Jake Gyllenhaal) is a down and out thief turned “Stringer” (a freelance photojournalists) through whom the movie explores what Wikipedia calls “the symbiotic relationship between unethical journalism and consumer demand” or, better known as, “If it bleeds, it leads.”

The demand for gloomy or sensational headlines can be explained by our negativity bias, something the media is very adept at exploiting to their advantage.

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How Do You Know If Your Investment Strategy Has Stopped Working?

by Isaac Presley, CFA on March 29, 2017

Over the last three calendar years, Global stocks (MSCI All Country World Index - ACWI) have returned a meager 3.7% annualized leading some to question their investment approach. Large market moves up are obviously fun, and even big moves down are often easier to ride out (at least you can see something happening) than a sideways markets. It’s extended periods of low returns which test patience and one’s ability to stick with a strategy and let it work over time. 

These periods can be frustrating, causing investors to wrestle with questions like: am I doing the right things to succeed? Is there somewhere else I should be focusing? Are there changes I should make? The pain of patience triggers the question: is my strategy broken?

In his fantastic biography, legendary mathematician, successful gambler, and hedge fund manager, Ed Thorp reveals how he answers this question.

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Social Security Income: How to Delay and Optimize for Taxes

by Isaac Presley, CFA on March 22, 2017

We received a couple of questions on our recent post “How to Increase Retirement Wealth With the Right Withdrawal Order” and will address the first one here. (Note: as we mentioned earlier this year, we will be making an effort to address more reader questions on the blog this year, so, if you have questions send them in.)

The question has to do with the issue of taxes. Specifically, is taking IRA distributions before you are required smart given a potential increase in taxes paid on Social Security income or is it better to delay Social Security in the first place. Here’s the question:

What about the effect of taxable income on SS taxes? Or delay SS with additional withdraws from retirement accounts to cover delay in SS?

This question breaks down into a couple of parts: First, how social security income is taxed and second when to start taking it.

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Contradicting Warren Buffett: When Volatility is Risk

by Isaac Presley, CFA on March 08, 2017

Last week I enjoyed dinner with a group of people, one of which happened to be a hedge fund manager and fellow CFA charterholder. As us finance-types are wont to do, we quickly made our way to a discussion of every investment nerd’s favorite question: what is risk?

Warren Buffett, in his 2014 Berkshire Hathaway annual letter (page 18), shared his views on the topic:

That lesson [that stocks are less risky than cash-equivalent holdings over the long-term] has not customarily been taught in business schools, where volatility is almost universally used as a proxy for risk. Though this pedagogic assumption makes for easy teaching, it is dead wrong: Volatility is far from synonymous with risk. 

Buffett is pointing out that over the long-term stocks are an attractive way to grow capital while cash and their equivalents (i.e., treasury bills) do little more than keep pace with inflation, as can be seen in the chart below. He’s obviously correct on this point, investing in stocks has historically been one of the best things you can do to compound your wealth. 

Now then, does this mean people should ignore volatility and only own stocks? I’d say no. Buffett aside, most of us don’t live in the long-term; we live in the present and volatility is a risk that must be managed in the present.

So, despite my better judgment, I'm going to a disagree with one of, if not the greatest investor of all time and my new friend, the hedge fund manager with the NYU law degree and Stanford MBA to his credit—in other words, two very bright people.

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How To Reduce Your Target Number and Retire Earlier

by Isaac Presley, CFA on March 02, 2017

In a recent article, Michael Kitces points out the dual benefits in staying off of the hedonic treadmill as it relates to income increases throughout your career—higher savings today and a lower required replacement income (meaning a lower portfolio balance is needed) when you retire. These two factors make a powerful combination in moving anyone towards their retirement number much quicker than someone who’s lifestyle quickly adjusts to any increases in income. While this concept is absolutely true and should be required reading for anyone with a significant amount time to retirement, my fear is that making radical changes to your level of spending, and therefore lifestyle, near retirement is simply unpalatable for most.

So, might there be another solution? Is there another tactic which allows you to hit your target retirement number quicker but without making drastic changes to your lifestyle?

There is, and it's already gaining traction due to the changing demographics of retirees and the shifting nature of work in modern society. 

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10 Things We Believe Wealth Management Should Be

by Isaac Presley, CFA on February 17, 2017

1. We believe in being intentional

What do you want to accomplish? Why do you want to accomplish it? Gaining this clarity by answering these “big questions” leads to better outcomes and a higher chance of success.

When you get clear on your objectives, only then can the best strategy be put in place to accomplish them. Being intentional about the results you seek will keep you focused on the goal and prevent opportunistic decision-making that can derail you, your investment strategy and your financial plan.

As Stephen Covey says, “Begin with the end in mind.”

2. We believe the best advice is tailored advice to you

All clients have different visions about what financial success looks like for them. No two people have an identical balance sheet, risk constraints, spending profile and investment objectives.

It’s for this reasons that our process is designed to begin with a discovery process so that we truly understand who you are and what you are trying to accomplish with your wealth. It’s only after this deep level of understanding is achieved can tailored advice, which leads to the best results, be delivered.

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