Investors Should Avoid the 'Rule of 25' Misconception
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Dec 29 2025
0mins
Should l Buy USA?
Source: NASDAQ.COM
- Misconception Revealed: Many investors still rely on the 'Rule of 25', which states that one should save 25 times their annual retirement spending, yet this rule has been debunked by its creator, William Bengen, highlighting its inapplicability.
- Updated Data: Bengen revised the safe withdrawal rate to 4.7% in 2022, indicating that one actually needs to save approximately 21.27 times their retirement spending, reflecting a higher requirement for retirement planning.
- Investment Alternative: For instance, the Liberty All-Star Equity Fund (USA) currently offers a yield of 10.6%, meaning an investor only needs to save $943,397, which takes about 17.5 years to retire, significantly less than the 29 years suggested by the 'Rule of 25'.
- Long-Term Profit Potential: The USA fund has paid an average of 82.4 cents per share annually over 39 years, and despite market price fluctuations, its long-term reinvestment yields a staggering 1,840%, demonstrating its sustainability as a source of retirement income.
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Analyst Views on USA
Wall Street analysts forecast USA stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for USA is USD with a low forecast of USD and a high forecast of USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
0 Analyst Rating
0 Buy
0 Hold
0 Sell
Current: 5.940
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Current: 5.940
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No data
About USA
Liberty All-Star Equity Fund (the Fund) is a diversified, closed-end management investment company. The Fund's investment objective is to seek total investment return, comprised of long-term capital appreciation and current income. The Fund seeks its investment objective through investment primarily in a diversified portfolio of equity securities. The Fund invests at least 80% of its net assets (plus any borrowings for investment purposes) in equity securities, defined as common stocks and securities convertible into common stocks such as bonds and preferred stocks, and securities having common stock characteristics such as warrants and rights to purchase equity securities (although, as a non-fundamental policy, not more than 20% of the value of the Fund’s total assets may be invested in rights and warrants). The Fund may lend its portfolio securities, write covered call and put options and engage in options and futures strategies. The Fund's investment advisor is ALPS Advisors, Inc.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Liberty All-Star Equity Fund December Update: Net Assets Reach $2.06 Billion
- Portfolio Overview: The Liberty All-Star Equity Fund employs a large-cap core investment style, combining three value and two growth managers to ensure a consistent investment philosophy and long-term performance that exceeds peers.
- Holdings Distribution: As of December, the top 20 holdings account for 38.1% of the total equity portfolio, with NVIDIA, Microsoft, and Alphabet representing 5.0%, 4.5%, and 4.1% respectively, indicating a concentrated investment strategy in technology stocks.
- Monthly Performance: The fund's net asset value (NAV) increased from $6.79 at the beginning of the month to $6.84, achieving a monthly return of 0.74%, although year-to-date performance is slightly weak at 8.80%, reflecting market volatility's impact on the fund.
- Asset Allocation: The portfolio allocates 24.9% to information technology, with financials and healthcare at 19.7% and 13.7% respectively, highlighting a focus on high-growth sectors and confidence in economic recovery.
See More
Liberty All-Star Equity Declares $0.18 Quarterly Dividend with 11.29% Yield
- Quarterly Dividend Announcement: Liberty All-Star Equity has declared a quarterly dividend of $0.18 per share, reflecting the company's stable cash flow and profitability in the current market environment, which is likely to attract more income-seeking investors.
- Attractive Yield: The forward yield of 11.29% not only provides substantial returns for existing shareholders but may also draw new investor interest, thereby increasing market demand for the company's stock.
- Shareholder Record Dates: The dividend will be payable on March 9, with a record date of January 22 and an ex-dividend date also on January 22, providing shareholders with clear expectations regarding the dividend, which helps to bolster investor confidence.
- Market Reaction Expectations: Amid concerns over the AI bubble, Liberty All-Star Equity's dividend policy may be viewed as a stable investment choice, and it is expected to have a positive impact on its stock price, especially in a context of increasing market volatility.
See More
USA Truck Completes Transition to Private Ownership in Arkansas
- Privatization Transition: USA Truck has successfully completed the sale of 100% of its shares to Arkansas-based UTAC, LLC from DSV, marking a significant privatization that is expected to enhance operational flexibility and customer service quality.
- Stable Leadership Structure: The new management team consists of three principals with deep knowledge of USA Truck and the transportation industry, ensuring stability and disciplined growth during the transition, with George Henry continuing as CEO to drive the company's development.
- Long-term Strategic Commitment: USA Truck emphasizes its focus on customer relationships, service reliability, and disciplined growth, leveraging global supply chain expertise to enhance its reputation as a trusted transportation partner and further solidify its market position.
- Legacy and Future Vision: CEO George Henry expressed gratitude to DSV and committed to continuing the four-decade legacy established by the founder, integrating global expertise to drive the company's long-term sustainable growth in the North American market.
See More
EWI Shareholders Question Rationale Behind SpaceX Stake Reduction
- Reduction Concerns: Saba Capital, EWI's largest shareholder, expresses deep concern over Baillie Gifford's 35% stake reduction in SpaceX, suggesting this move, executed two months before SpaceX's revaluation, may have been aimed at facilitating a merger with USA at shareholders' expense.
- Loss Assessment: The sell-down resulted in an estimated £37 million loss for EWI shareholders, approximately 4.4% of EWI's total assets, highlighting management's missteps in critical decision-making that could undermine future investor confidence.
- Merger Motivation: Saba indicates that merger discussions between EWI and USA were likely underway prior to the sell-down, raising questions about whether the interests of management and Baillie Gifford were prioritized over those of shareholders, necessitating scrutiny of the merger's rationale.
- Transparency Demand: Saba calls for EWI's board to provide detailed information regarding the sell-down before the upcoming shareholder meeting, emphasizing the importance of corporate governance and informed decision-making for shareholders.
See More
Investors Should Avoid the 'Rule of 25' Misconception
- Misconception Revealed: Many investors still rely on the 'Rule of 25', which states that one should save 25 times their annual retirement spending, yet this rule has been debunked by its creator, William Bengen, highlighting its inapplicability.
- Updated Data: Bengen revised the safe withdrawal rate to 4.7% in 2022, indicating that one actually needs to save approximately 21.27 times their retirement spending, reflecting a higher requirement for retirement planning.
- Investment Alternative: For instance, the Liberty All-Star Equity Fund (USA) currently offers a yield of 10.6%, meaning an investor only needs to save $943,397, which takes about 17.5 years to retire, significantly less than the 29 years suggested by the 'Rule of 25'.
- Long-Term Profit Potential: The USA fund has paid an average of 82.4 cents per share annually over 39 years, and despite market price fluctuations, its long-term reinvestment yields a staggering 1,840%, demonstrating its sustainability as a source of retirement income.
See More
Rare Buying Opportunity in High-Yield Closed-End Funds
- Market Anxiety Intensifies: Despite a three-year market rally, rising investor concerns about an AI bubble and inflation have led to declining market prices for many closed-end funds, creating a unique buying opportunity.
- Guggenheim Fund Performance: The Guggenheim Strategic Opportunities Fund (GOF) boasts a yield of 17.9%, yet its market price has not reflected its strong portfolio performance due to investor sentiment, indicating potential investment value.
- Liberty All-Star Fund Discount: The Liberty All-Star Equity Fund (USA) is trading at a 9.4% discount, with a portfolio that includes high-quality stocks like NVIDIA and Microsoft, suggesting its current price is below historical levels, making it a smart buy.
- Calamos Fund Potential: The Calamos Dynamic Convertible & Income Fund (CCD) offers an 11% yield, and although its market price has fallen due to low investor sentiment, its portfolio has performed well under the Fed's slower-than-expected rate cuts, indicating a likely rebound ahead.
See More
Liberty All-Star Equity Fund December Update: Net Assets Reach $2.06 Billion
- Portfolio Overview: The Liberty All-Star Equity Fund employs a large-cap core investment style, combining three value and two growth managers to ensure a consistent investment philosophy and long-term performance that exceeds peers.
- Holdings Distribution: As of December, the top 20 holdings account for 38.1% of the total equity portfolio, with NVIDIA, Microsoft, and Alphabet representing 5.0%, 4.5%, and 4.1% respectively, indicating a concentrated investment strategy in technology stocks.
- Monthly Performance: The fund's net asset value (NAV) increased from $6.79 at the beginning of the month to $6.84, achieving a monthly return of 0.74%, although year-to-date performance is slightly weak at 8.80%, reflecting market volatility's impact on the fund.
- Asset Allocation: The portfolio allocates 24.9% to information technology, with financials and healthcare at 19.7% and 13.7% respectively, highlighting a focus on high-growth sectors and confidence in economic recovery.
See More
Liberty All-Star Equity Declares $0.18 Quarterly Dividend with 11.29% Yield
- Quarterly Dividend Announcement: Liberty All-Star Equity has declared a quarterly dividend of $0.18 per share, reflecting the company's stable cash flow and profitability in the current market environment, which is likely to attract more income-seeking investors.
- Attractive Yield: The forward yield of 11.29% not only provides substantial returns for existing shareholders but may also draw new investor interest, thereby increasing market demand for the company's stock.
- Shareholder Record Dates: The dividend will be payable on March 9, with a record date of January 22 and an ex-dividend date also on January 22, providing shareholders with clear expectations regarding the dividend, which helps to bolster investor confidence.
- Market Reaction Expectations: Amid concerns over the AI bubble, Liberty All-Star Equity's dividend policy may be viewed as a stable investment choice, and it is expected to have a positive impact on its stock price, especially in a context of increasing market volatility.
See More
USA Truck Completes Transition to Private Ownership in Arkansas
- Privatization Transition: USA Truck has successfully completed the sale of 100% of its shares to Arkansas-based UTAC, LLC from DSV, marking a significant privatization that is expected to enhance operational flexibility and customer service quality.
- Stable Leadership Structure: The new management team consists of three principals with deep knowledge of USA Truck and the transportation industry, ensuring stability and disciplined growth during the transition, with George Henry continuing as CEO to drive the company's development.
- Long-term Strategic Commitment: USA Truck emphasizes its focus on customer relationships, service reliability, and disciplined growth, leveraging global supply chain expertise to enhance its reputation as a trusted transportation partner and further solidify its market position.
- Legacy and Future Vision: CEO George Henry expressed gratitude to DSV and committed to continuing the four-decade legacy established by the founder, integrating global expertise to drive the company's long-term sustainable growth in the North American market.
See More
EWI Shareholders Question Rationale Behind SpaceX Stake Reduction
- Reduction Concerns: Saba Capital, EWI's largest shareholder, expresses deep concern over Baillie Gifford's 35% stake reduction in SpaceX, suggesting this move, executed two months before SpaceX's revaluation, may have been aimed at facilitating a merger with USA at shareholders' expense.
- Loss Assessment: The sell-down resulted in an estimated £37 million loss for EWI shareholders, approximately 4.4% of EWI's total assets, highlighting management's missteps in critical decision-making that could undermine future investor confidence.
- Merger Motivation: Saba indicates that merger discussions between EWI and USA were likely underway prior to the sell-down, raising questions about whether the interests of management and Baillie Gifford were prioritized over those of shareholders, necessitating scrutiny of the merger's rationale.
- Transparency Demand: Saba calls for EWI's board to provide detailed information regarding the sell-down before the upcoming shareholder meeting, emphasizing the importance of corporate governance and informed decision-making for shareholders.
See More
Investors Should Avoid the 'Rule of 25' Misconception
- Misconception Revealed: Many investors still rely on the 'Rule of 25', which states that one should save 25 times their annual retirement spending, yet this rule has been debunked by its creator, William Bengen, highlighting its inapplicability.
- Updated Data: Bengen revised the safe withdrawal rate to 4.7% in 2022, indicating that one actually needs to save approximately 21.27 times their retirement spending, reflecting a higher requirement for retirement planning.
- Investment Alternative: For instance, the Liberty All-Star Equity Fund (USA) currently offers a yield of 10.6%, meaning an investor only needs to save $943,397, which takes about 17.5 years to retire, significantly less than the 29 years suggested by the 'Rule of 25'.
- Long-Term Profit Potential: The USA fund has paid an average of 82.4 cents per share annually over 39 years, and despite market price fluctuations, its long-term reinvestment yields a staggering 1,840%, demonstrating its sustainability as a source of retirement income.
See More
Rare Buying Opportunity in High-Yield Closed-End Funds
- Market Anxiety Intensifies: Despite a three-year market rally, rising investor concerns about an AI bubble and inflation have led to declining market prices for many closed-end funds, creating a unique buying opportunity.
- Guggenheim Fund Performance: The Guggenheim Strategic Opportunities Fund (GOF) boasts a yield of 17.9%, yet its market price has not reflected its strong portfolio performance due to investor sentiment, indicating potential investment value.
- Liberty All-Star Fund Discount: The Liberty All-Star Equity Fund (USA) is trading at a 9.4% discount, with a portfolio that includes high-quality stocks like NVIDIA and Microsoft, suggesting its current price is below historical levels, making it a smart buy.
- Calamos Fund Potential: The Calamos Dynamic Convertible & Income Fund (CCD) offers an 11% yield, and although its market price has fallen due to low investor sentiment, its portfolio has performed well under the Fed's slower-than-expected rate cuts, indicating a likely rebound ahead.
See More
