Looking at real rates can help you determine how much your purchasing power may grow, says Mihir Worah, head of the real-return portfolio management team at Pacific Investment Management Co.
Actuaries guess, er, compute how much money is needed today based on life expectancies of retirees as well as the expected investmentreturn on the pension portfolio.
Overall, his tax return looks like a wealthy retiree with a large investmentportfolio, and he has the luxury of waiting to generate long-term capital gains.
Penney has some tough sledding ahead, but that it was the only stock in his portfolio that could return 15 times his investment because it trades at a discount to the value of its real estate and inventory.