Do You Need to Diversify Your Bonds?
We spend a lot of time talking about the importance of diversification. We have to look at bonds a little differently; they come with different risks than stocks.
Finding the Right Balance Between Inflation Risk and Investment Risk
When we talk about retirement risks, people often tend to fixate on their investments. Yes, investment risk is important, but it’s only a piece of the puzzle. The primary risk to your retirement is not having enough money to do what you want. Like I said, investment risk certainly plays into this, but you need […]
US Markets Are Outperforming Global Markets, What Should You Do?
To say international stocks haven’t been doing great relative to US stocks is a massive understatement. What does that mean for your portfolio?
Most of the investment advice you get is (or should be) conditional. Advisors tend to steer clear of definitive, blanket statements, but this is one that I’m pretty comfortable making if you have stocks in your portfolio, you should probably own both domestic and international st
The Most Important Investment Decision You’ll Ever Make About Your Portfolio
When most people think about investing, they’re thinking about stuff that doesn’t really matter. They’re caught up in the minutiae: What fund should I own? How fast did the iPhone 7 sell out (and are people really going to be okay with no headphone jack)? What sector is going to take off this fall? But that’s not really what determines your portfolio’s fate. What really matters is your ratio between stocks and bonds.
Should You Keep International Stocks in Your Portfolio?
There will always be some asset class that does poorly. Over the last few years, one of those asset classes has been international stocks. They have underperformed US stocks each of the previous three years, and it’s looking like they’ll do it again this year. Given this underperformance, we’ve had some people ask why we […]
Should You Add Real Estate to Your Portfolio?
We talk a lot about stocks and bonds, but we spend less time on hard assets like commodities or real estate. Investing in real estate is very similar to investing in stocks, so it requires many of the same principles as any other asset class, just with a little twist.
Should You Lower Your Distributions If Your Portfolio Underperforms The Stock Market?
Another optimistic assumption of classic safe withdrawal rate studies is that retirees are able to earn precisely the underlying index returns net of the risks. But three truths dispute that idea.
Should Your Portfolio Include Commodities?
When it comes to investing, a whole bunch of magical investment solutions seem to be floating around out there, but should you really do anything differently?
Does Asset Allocation Affect Withdrawal Rates?
One other important factor from William Bengen’s original study is asset allocation. In particular, he recommended that retirees maintain a stock allocation of 50-75%, writing, “I think it is appropriate to advise the client to accept a stock allocation as close to 75 percent as possible, and in no cases less than 50 percent.”
A World of Opportunities: The Benefits of Global Diversification
It’s obvious why a U.S.‑based investor may think it’s better to stay away from international investing, but you don’t get the full story by just looking at the short-term returns of different asset classes in isolation. You need to take a long-term perspective and think about how everything affects your total portfolio.
