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Ben Felix video from March this year:
'The Most Controversial Paper in Finance'
https://www.youtube.com/watch?v=-nPon8Ad_Ug

The 2025 paper Beyond the Status Quo: A Critical Assessment of Lifecycle Investment Advice suggests that investors should hold globally diversified 100% stock portfolios for their entire lives. It has been met with intense criticism.

So I think Ben Felix has recommended to not actually be 100% stocks in retirement due to behavioral issues. Stocks plus some cash for living expenses. Suggested 3 years of cash. Yes, this is a "cash bucket", but it does help the retiree to hold on during a bear market.

Interesting (to me) - this is similar to Warren Buffett's advice to his trustee for his wife: 90% S&P500 index fund, 10% cash, with a 3-4% withdrawal (2.5 - 3 years expenses in cash).

Confirms my biases, so I'm happy.

Some of you will have your bias toward leverage confirmed :-)

I am still 3-5 years away from a potential retirement - but this past weekend I did a deep dive into some scenarios - its complicated (especially when you add tax considerations)! I don't have a work pension and will be 5+ years "early" for any government pension; which further complicates things.

After a LOT of YouTube videos to understand the basic parameters and a hours buried in an excel worksheet I am leaning towards a very heavy stock allocation in retirement.

Question for the group; what rate of return do you use in your models? I have been using values as low as inflation+2% to inflation+6% - clearly the more you allocate to cash/bonds the lower the number.

I will probably have more questions for the board as I keep digging.

tecmo
...

Question for the group; what rate of return do you use in your models? I have been using values as low as inflation+2% to inflation+6% - clearly the more you allocate to cash/bonds the lower the number.

The rate of return in your range almost doesn't matter. The key is the sequence of returns. Assuming spending is roughly constant + inflation, a bad sequence of returns early in the retirement period can lead to a busted portfolio. A good sequence early in the period will drive it to the moon.

The key is the sequence of returns. Assuming spending is roughly constant + inflation, a bad sequence of returns early in the retirement period can lead to a busted portfolio.

This is indeed the key! If you look at the safe withdrawal studies, you will see that while overall returns over the period is important, the sequence of those returns is even more important. That's why, when a 60/40 30-year safe withdrawal results in about 4%, the ones that fail at 4.1% (anything over about 4%) are the two periods beginning in 1928/29 ("The Great Depression") and beginning in 1966/67 ("The Great Stagflation"). The reason those periods fail is because their early years had a terrible sequence of returns.

{{ The rate of return in your range almost doesn't matter. The key is the sequence of returns. }}

A 60 % stock 40% fixed income portfolio with a 4% withdrawal has 10 years worth of spending in fixed income. If you want to survive the worst "sequence of returns" in history, you need something like that 10 years worth in fixed income.

https://retireearlyhomepage.com/sequenceofreturnsr...

intercst

A 60 % stock 40% fixed income portfolio with a 4% withdrawal has 10 years worth of spending in fixed income. If you want to survive the worst "sequence of returns" in history, you need something like that 10 years worth in fixed income.

Only if you have no other sources of income and are 100% dependent on withdrawals from your investment portfolio.

And also assuming that fixed income investments will not be effected by whatever is happening in the economy that is cratering businesses for 10 years. A somewhat "bold" assumption.
Companies are going broke right and left, which causes stocks to go down and down but they keep paying the interest on their bonds no problem.

Color me skeptical.

{{ A 60 % stock 40% fixed income portfolio with a 4% withdrawal has 10 years worth of spending in fixed income. If you want to survive the worst "sequence of returns" in history, you need something like that 10 years worth in fixed income.

Only if you have no other sources of income and are 100% dependent on withdrawals from your investment portfolio. }}

I'm talking about the historical 30-year surviability of the investment portfolio.

Of course, something worse could happen in the future. But you should at least have a plan that would have survived the worst of the past.

intercst

Companies are going broke right and left, which causes stocks to go down and down but they keep paying the interest on their bonds no problem.

What happened to GM bonds when they went BK (and were bailed out with government money) in the GFC? Those bonds became essentially worthless and were replaced with some equity after the bailout.

Of course, that wasn't the way bonds versus equity was supposed to work, but government made it a condition for the bailout.

Only if you have no other sources of income and are 100% dependent on withdrawals from your investment portfolio.


Which for early-retirement is the likely scenario until SS kicks in.

tecmo
...

"Only if you have no other sources of income and are 100% dependent on withdrawals from your investment portfolio."

Which for early-retirement is the likely scenario until SS kicks in.

...for dumb people.

Non-dumb people[*] don't voluntarily retire early unless they are *very* sure that they have solid coverage of their living expenses until later income sources come onstream.

Early SS comes online at 62.
Pensions come online at almost any age after you meet the age threshold.

And that's got nothing to do with your fixed-income asset allocation. That's got to do with cash in the bank. It's the long term equivalent version of Emergency Fund.

It is called "F.I.R.E." for a reason, and not just "R.E."
Financially Independent Retired Early.


-----------------
[*] There were plenty of people who erroneously thought they were non-dumb during the late-1990s due to the dot-com boom.

...for dumb people.

What kind of people are quick to label others as 'dumb'?

Tom

“What kind of people are quick to label others as 'dumb'?”

MAGA

And also assuming that fixed income investments will not be effected by whatever is happening in the economy that is cratering businesses for 10 years. A somewhat "bold" assumption.
Companies are going broke right and left, which causes stocks to go down and down but they keep paying the interest on their bonds no problem.

Bengen's study used 100% government bonds. If the US government isn't paying interest on bonds, then it is safe to assume it won't be paying Social Security either.

Which for early-retirement is the likely scenario until SS kicks in.

...for dumb people.

Non-dumb people[*] don't voluntarily retire early unless they are *very* sure that they have solid coverage of their living expenses until later income sources come onstream.

A bit circular, what is a recommended way of covering living expenses? Holding 100% stocks seems very risky, hence the original question.

tecmo
...

A bit circular, what is a recommended way of covering living expenses? Holding 100% stocks seems very risky, hence the original question.

Cash. Or near-cash like CDs, short term T-Bills, short-term bonds funds like SHY, SPSB, VCSH, etc. Along with income like pensions & Social Security. SS can start at age 62.

Keep enough cash/near-cash handy to cover the ebb & flow of immediate expenses. Just like you keep $50 cash in your wallet even though you carry 3 credit cards with enough credit limit to buy a small car.

People are inordinately scared of Sequence Of Returns Risk. It's just another thing that you need to be aware of. The price for completely avoiding the risk is very very high.

Keep in mind that every day is the first day of the rest of your life. Therefore every day is the beginning of a SOR Risk. The 5th year of retirement is no different that the 1st year. You just have 5 years less of remaining lifetime. Not a big deal when your initial lifetime was 30-40 years.

Some people (and a lot of authors of financial articles) freak out about the SORR in the first year but completely ignore the SORR of any subsequent year. They think that the 1st year is special. It is not.

Holding 100% stocks is risky only when you are completely dependent on that value.
100% stocks in a $2,000,000 portfolio is not risky the way 100% stocks in a $500,000 portfolio is.

Work with an assumption that stocks will take a 50% loss sometime. Then stocks recover a year or two or three later. Can you survive during that 50% drawdown?

We typically think of our portfolio being just the brokerage & 401K accounts.
That should be 100% stocks, because stocks are the asset class that is going to grow. Bonds do not grow, at best they maintain their value. A substantial bond allocation in your portfolio is a huge drag on overall performance.

The cash & near-cash? Don't think of that as part of your investment portfolio.

Don't retire on a shoestring.
My own personal opinion is that if you cannot handle having your portfolio lose 50% on the day after you retire, then you don't have enough to safely retire.


From a personal aspect, we retired in late 2006. Just ahead of the 2008-2009 crash where stocks lost 50%. So I've lived it.

Keep in mind that every day is the first day of the rest of your life. Therefore every day is the beginning of a SOR Risk.

This is a misconception. SORR occurs in the first few years of the withdrawal phase. Starting from the basic assumption that the future is no worse than the past, if you don't experience a poor sequence of returns early in the period, then your portfolio will grow large enough by about year 10 that SORR doesn't matter. Assuming also that your WR remains the same, adjusted for inflation.

There is fundamentally only one way to mitigate SORR, and that's do what you do did: Start enough with enough money such that your WR rate is so low SOR doesn't matter. The trade off though is either working more years or having a lower standard of living in retirement. But that's essentially what the 4% rule is. A WR so low that SOR doesn't matter, again using the standard assumption.

But that's essentially what the 4% rule is. A WR so low that SOR doesn't matter, again using the standard assumption.

Yup.

The freak-out about SORR is primarily when retiring on a shoestring.

The standard mitigation is to start off with an outsized cash(ish) allocation. Which causes a lower portfolio growth due to the undersized equity allocation.

The price of protection for retiring on a shoestring is high.


A friend told me that they were paying a Financial Advisor a bunch of bucks to look over their retirement accounts and tell them if they could afford to retire.

I told him that he could figure it out himself for free. Calculate 4% of the accounts and determine if that was enough for them to live on.

He wanted an expert opinion, so he paid several hundred to have the FA do the same calculation (under the sheets) and prepare a 30 page document saying so.

{{ The price of protection for retiring on a shoestring is high. }}

Yep. But it also means that some one retiring in their 30's or 40's is also very likely to be wealthy by the time they qualify for Social Security (with 77% of the maximum monthly check, while paying about half the FICA taxes.) And you're getting all that while relieving yourself of the inconvenience of submitting to the supervision of an employer.

Why high income 40 year old retirees still get crazy big Social Security checks at age 62
https://retireearlyhomepage.com/socialsecurity2023...

intercst

Ray: Work with an assumption that stocks will take a 50% loss sometime. Then stocks recover a year or two or three later. Can you survive during that 50% drawdown?

We typically think of our portfolio being just the brokerage & 401K accounts.
That should be 100% stocks, because stocks are the asset class that is going to grow. Bonds do not grow, at best they maintain their value. A substantial bond allocation in your portfolio is a huge drag on overall performance.

The cash & near-cash? Don't think of that as part of your investment portfolio.

100% stocks in retirement with 4% WR.
Enough cash & near-cash to get through a 50% drawdown, say 2.5 years of expenses worth, or 10% of liquid net worth.

1995 retiree is doing great:
https://testfol.io/?s=6HesmQrqaT5

2000 retiree had a rough time, but survived:
https://testfol.io/?s=aeYq85Wwfqv

2008 retiree had a rough time and is doing just fine:
https://testfol.io/?s=51DscOsXNkQ

It could be rough though, unless you have other income to rely on, like a defined pension.

The freak-out about SORR is primarily when retiring on a shoestring.

There are other ways to think about this. I have $X dollars available; what is the optimal way to spend that money; regardless of your living expenses. Sequence of Returns is something to consider here as well.

tecmo
...

Keep enough cash/near-cash handy to cover the ebb & flow of immediate expenses.

What is the definition of "immediate"? 1 month? 1 year? 10 years? (assume I will be 10 years away from SS)

Some things I am considering

1. Holding CASH (the easiest, probably least optimal strategy)
2. Holding a mix of CASH and Bonds and Dividend paying companies - enough to finance my lifestyle


So I am considering what I think is referred to as the "bucket strategy"

Bucket 1 : Used to finance my lifestyle until SS hits (say 10 years)
- Put sufficient funds into this bucket such that Bond interest and Dividends cover this period
- Forecasting Bonds payouts can be a challenge, maybe use 3% as a baseline
- Forecast Dividend growth of about 2% annually

Bucket 2 : Used for long term retirement
- Put remaining funds into this bucket
- Keep this 100% in equities for the next 10 years
- Once fully retired, move this into a 60/40 portfolio and use the 4% rule to fund lifestyle


Managing my basic expenses is not an issue at all, this is about flying first class vs. economy, and figuring out if 10 years at first class is feasible.

Not an optimal allocation of capital, but its easy to use this as a forecasting tool.

tecmo
...

If you're post-retirement, but pre-Medicare, you don't want dividends. That will affect the government subsidy in the ACA.

What is the definition of "immediate"? 1 month? 1 year? 10 years? (assume I will be 10 years away from SS)

Maybe 6 months? I would not call one year or 10 years immediate.


Some things I am considering
1. Holding CASH (the easiest, probably least optimal strategy)
2. Holding a mix of CASH and Bonds and Dividend paying companies - enough to finance my lifestyle

Cash, definitely cash. It's not meant to be optimal, it's to be available in an instant.

Bad windstorm blew many trees down, two large trees across our driveway. Hustling good ole boys with chainsaws driving around in a pickup truck offering to clear trees on the spot. Wanted cash-cash but would agree to take a check that they'd cash tomorrow.

We had our heat pump go out in the middle of a week of 95 degree days once. $12,000 but they would hold a check for a week. Not immediate but certainly urgent quickly.

Bonds are not cash, bonds pay income once a quarter. To raise immediate cash you have to sell them at whatever price you can get.

Dividend paying companies. A sub-optimal investment. Dividends come at the expense of total return. People tend to implicitly believe that dividends are free money. they aren't.


So I am considering what I think is referred to as the "bucket strategy"

Bucket 1 : Used to finance my lifestyle until SS hits (say 10 years)

First off, a high enough allocation to bonds to last for 10 years will be an huge drag on the overall return. The only growth will be the stock allocation which you have greatly reduced.

Second off, I did some serious spreadsheet work on this "bucket strategy" several years ago, after following a series of posts and articles about it. The articles were not clear at all on how to run it.

Here's the link where you can look at it and can download it to play with the parameters: https://www.dropbox.com/scl/fi/h0cnizmwed0rxhe1gq7...

So I am considering what I think is referred to as the "bucket strategy"

Sometimes thinking in buckets can be useful, but for me most often it seems to confuse things. As you spend down the first bucket, your total portfolio allocation is changing to a higher stock weighting. In other words, you're simply changing your asset allocation over time. Kitces calls a variation of this the reverse equity glidepath. In the early part of retirement you start off bond heavy, and start weighting more towards stocks as you move through the critical early period. So you don't need two buckets. Just one bucket that you rebalance each year to your desired asset allocation.


https://www.kitces.com/blog/managing-portfolio-siz...

Buckets is a good way to think of things although it all ends up being one big bucket.

Although I'm not actually following through on this 100% I had money in Fidelity to cover me from 60 to 70 when I would start my social security. A bunch of treasuries. I didn't actually create a ladder but just bought them, often shorter term ones here and there. Then at 70, my withdrawal rate might be in the 2% range and I would use my larger account at Schwab.

Fortunately despite being fairly conservatively invested, neither account has declined in value due to the markets.

I have gotten better at mapping out treasuries, TIPs and MYGAs to cover my expenses over those years. I still have some gaps here and there but overall not bad.

I don't think I would ever be comfortable 100% in stocks unless I had a pension that was high enough to cover my essential expenses which I don't.


100% stocks in retirement with 4% WR.
Enough cash & near-cash to get through a 50% drawdown, say 2.5 years of expenses worth, or 10% of liquid net worth.

1995 retiree is doing great:
https://testfol.io/?s=6HesmQrqaT5

2000 retiree had a rough time, but survived:
https://testfol.io/?s=aeYq85Wwfqv

2008 retiree had a rough time and is doing just fine:
https://testfol.io/?s=51DscOsXNkQ


I'm not sure I would have lived through that drawdown. Down 70% within 8 years of retirement and withdrawing ~$40K on a $300K portfolio. Definitely would cause ulcers or a heart attack and a lot of sleepless nights.

Rich

Re: the bucket strategy...

Current financial adviser conventional/standard wisdom outlines the following:
1: 1/3 cash/cash equivalents,TIPS ladders, short term treasuries. or at least enough to cover 3 years of (net) living expenses without withdrawing from growth Bucket. (net) living expenses are mandatory ones, not discretionary, net of "guaranteed" fixed income - SS, pensions, etc.

2: 1/3 intermediate term bonds/fixed income funds with moderate yields. 5-10y duration govt and corporate debt stuff.

3: 1/3 growth stock etfs/funds.

Rebalanced quarterly or 2x/year.

For this, they typically want a fee of .75% to 1.25% of AUM.

FC

I'm not sure I would have lived through that drawdown. Down 70% within 8 years of retirement and withdrawing ~$40K on a $300K portfolio. Definitely would cause ulcers or a heart attack and a lot of sleepless nights.

The 2000 retiree, I agree. No way I would have continued to withdraw that much after a 70% drawdown. Who would? Only folks that absolutely had to.

{{ The 2000 retiree, I agree. No way I would have continued to withdraw that much after a 70% drawdown. Who would? Only folks that absolutely had to. }}

Even wealthy people who could afford to spend cut back during stock market declines.

I actually more than doubled my spending during the 2008-2012 downturn when international travel, cruises, hotels, etc. went on sale due to lack of demand. Of the 12 or so cruises I took during that period, a 7-day Adriatic Sea cruise from Venice on Royal Caribbean for less than $500 was the highlight. It was almost cheaper than staying home.

When cruise and airline prices returned to more normal levels, I found I had less of an appetite for international travel.

intercst

I would need $10,000,000 to retire with 100% stocks. Assuming an annual WR of $250,000, 10 mil gets you $117,000 in dividends plus $400,000 from any 4% rule. You could fund your retirement forever even if the markets decline 50%. I tend to think of $10 million as self-healing wealth. It’s never going away.

If you’re happy to retire on the median household income of $80,000 then $3.2 million would guarantee that lifestyle through the most dire market.

In both scenarios you are extremely unlikely to die broke. If anything, you’ll die filthy rich.

I think you can probably live rich and die broke on about $2.5 million 100% invested in stocks.

I would need $10,000,000 to retire with 100% stocks. Assuming an annual WR of $250,000, 10 mil gets you $117,000 in dividends plus $400,000 from any 4% rule. You could fund your retirement forever even if the markets decline 50%. I tend to think of $10 million as self-healing wealth. It’s never going away.

Simple enough: work, save, and invest until you have $10m. Doable for the higher earner who can save 50% or so.

I think you can probably live rich and die broke on about $2.5 million 100% invested in stocks.

At what withdrawal rate?

Simple enough: work, save, and invest until you have $10m.

Damn, why didn't I think of that?

"I think you can probably live rich and die broke on about $2.5 million 100% invested in stocks."

At what withdrawal rate?


When we were mulling over early retirement my wife did some simple girl math in her head. "If we have $1 million in the bank we could spend $100,000 a year and it would last 10 years. With SS and pension we could take $50,000 a year and it would last 20 years. What are we waiting for???"

With SS and pension we could take $50,000 a year and it would last 20 years. What are we waiting for???"

$50k from pension and SS helps a lot. I'm guessing you have employer subsidized health insurance also?

"With SS and pension we could take $50,000 a year and it would last 20 years. What are we waiting for???""

$50k from pension and SS helps a lot.


I wish!
That was $50K from $1 million would last for 20 years.
Pension & SS is on top of that.



I'm guessing you have employer subsidized health insurance also?

Yes, until medicare. Well, not subsidized after quitting, but at the employer group rate. $1000 per month per person.
Before quitting the subsidized rate was $450/mo total.

Maybe I should have started a new thread but people here that invest in bonds, do you use ETFs/mutual funds or do you invest in individual bonds?

Personally I invest in individual bonds since I know what I will get at maturity while with funds there isn't really a maturity (although they discluse an avg maturity) so when you need the money the fund could be down 10 or 20% and I wouldn't like that. I prefer fixed income to be safe with known values.

Rich

<< $50k from pension and SS helps a lot. >>

I'm getting a bit over $50K from two small Fortune 500 pensions from jobs I left in the 80's and 90's, plus SS -- and I quit working in 1994 at age 38.

I'd be astonished if there aren't a lot of people with more than $50k in annual pension and SS income.

intercst

I'd be astonished if there aren't a lot of people with more than $50k in annual pension and SS income.

Pensions have already become an anachronism in the private sector. For boomers, who retired from white collar jobs, those still alive, yes the above is true.

My former employer of 27 years capped & grandfathered the traditional pension 15 years ago, replaced by an extra 4% of salary "cash balance" pension. And has proceeded to fire / ER / RIF / layoff every employee over 50 for the last 8 years to reduce that liability.

For anyone under 45, it's 401K or bust, ba-bee. Hope you get a high enough paying job to generate a significant SS payment that will probably get cut - or inflated down to nothing in 20 years by these clowns.

I'm getting a bit over $50K from two small Fortune 500 pensions from jobs I left in the 80's and 90's, plus SS -- and I quit working in 1994 at age 38.


Yeah, my wife worked for a Fortune 500 for 15 years before becoming a stay-at-home mom. She'll get a pretty nice pension from them. That, plus her and my SS will be quite a bit more than $50k. Might just pay for our healthcare!

Personally I invest in individual bonds since I know what I will get at maturity....

I use preferred stocks for that reason, substituting call date for maturity.

Eric Hines

I use preferred stocks for that reason

Same. WFC-L and BAC-L mostly.

What do you like?

A 4% withdrawal rate. Add in the 1.17% dividends to your withdrawals and you’ll have around $128,000 to live on each year with your nut growing over time (on average).

A 4% withdrawal rate. Add in the 1.17% dividends to your withdrawals and you’ll have around $128,000 to live on each year with your nut growing over time (on average).

That's a 5.17% withdrawal rate.

Yessir.

5.17% WR, 100% stocks:

FIRECalc looked at the 125 possible 30 year periods in the available data, starting with a portfolio of $2,500,000 and spending your specified amounts each year thereafter.

Here is how your portfolio would have fared in each of the 125 cycles. The lowest and highest portfolio balance at the end of your retirement was $-7,741,259 to $16,533,295, with an average at the end of $4,190,156. (Note: this is looking at all the possible periods; values are in terms of the dollars as of the beginning of the retirement period for each cycle.)

For our purposes, failure means the portfolio was depleted before the end of the 30 years. FIRECalc found that 33 cycles failed, for a success rate of 73.6%.

https://www.firecalc.com/firecalcresults.php

When we were mulling over early retirement my wife did some simple girl math in her head.

Girl math? In her head? Didn't have to use her fingers and toes to count?
Or also use your fingers and toes to count above 20?

Why do "girls" ever think about things so complicated and "manly" as math?

Somehow, some do: https://www.youtube.com/watch?v=zm_6zR6ofuo

Would like to say more, but my good 'ol tradwife is calling me to dinner.
She has already set three places for the two of us at our dining table.

Really need to talk to her about the difference between 2 and 3.

vez

I'm getting a bit over $50K from two small Fortune 500 pensions from jobs I left in the 80's and 90's, plus SS -- and I quit working in 1994 at age 38.

I'd be astonished if there aren't a lot of people with more than $50k in annual pension and SS income.

intercst


I'm wondering if you are one of the many older folks completely out of touch from reality and are living in a past that no longer exists.

Very few people, especially if you exclude state/federal jobs, get pensions. Somewhere around 15%. That is significantly lower than what it was 50 years ago.

Your pensions had to be very generous to provide ANY money, much less $50K a year to someone who retired at 38. The only people I know of who would get a pension at 38 would be military or police jobs that allow you to retire after 20 yrs. People often think government pensions are generous but when I left after 15 yrs and at a similar age to you, my federal pension would have been $9,000 a year. Nothing close to $50K.

You might want to go back to work at a few places and find out the new reality of life that has occurred over the 30 yrs you've been gone. It is much more difficult and often less rewarding for the vast majority of people.

Rich

No pension here.

I had a few coworkers that were going to get one. The company was spun-off from General Instruments. Those employees that had secured a pension from GI carried it into the new company. I was hired not too long after the spin-off, and I got no pension. I did get ISO options. 1poorlady was hired a few years after me, and she got no ISO options. Now they don't even issue options. It's RSUs.

Same. WFC-L and BAC-L mostly.
What do you like?

Depends on what I find in QuantumOnline when I need to replace a called preferred. I hold out for 6% or better coupon and a call date at least 3 years in the future from my buy.

Eric Hines

I used to have a subscription to CDx3, until he closed down when covid hit and interest rates went to zero thus killing new preferred stocks.

CDx3 now has a weekly email newsletter which is free and lists a number of good preferred stock candidates that just crossed below par. The ones with a score of 10 are the best ones to buy. Read the (now free) book for explanation of the scoring.

The 10's on the 10/31/25 newsletter are:

PRH, 5.95%
OXLCG, 7.95%
BEPJ, 7.25%

https://www.preferredstockinvesting.com/v5/pages/r...

<< Your pensions had to be very generous to provide ANY money, much less $50K a year to someone who retired at 38. >>

My pensions aren't $50k/yr for someone with 5 years of service (longest I stayed in a job) -- more like 3 or $4k/yr.

But combine that with SS and you get more than $50k/yr.

intercst

I used to have a subscription to CDx3....
CDx3 now has a weekly email newsletter which is free and lists a number of good preferred stock candidates that just crossed below par.

I read his first book and subscribed to his newsletter (then a paid subscription) for a year. After that, I figured I'd learned what he had to teach, and his selection rules were easy to follow, so I stopped the paid subscription.

I still get his free newsletter, and those preferreds are the first ones I chase on QuantumOnline. Often, the 10s don't have the coupon I'm looking for; more often, they have call dates that are sooner than I like. The 9s do well as a first cut. I often find a few more in a direct (cumbersome) search on QuantumOnline.

Eric Hines

Rayvt:

We typically think of our portfolio being just the brokerage & 401K accounts.
That should be 100% stocks, because stocks are the asset class that is going to grow. Bonds do not grow, at best they maintain their value. A substantial bond allocation in your portfolio is a huge drag on overall performance.
_______________________________________________________

Just because, over time, 100% stocks may grow faster than other mixtures, doesn't mean that you are constitutionally equipped to handle the roller-coaster ride.

I'm probably atypical here. Started with zip. Got married halfway through college (still with the same gal more than five decades later). Went to night school to get my degrees (EE and MBA). Started businesses which were symbiotic and grew nicely. Invested in stocks to about 30% of assets and then did some substantial currency trading (about 10% of net worth into Australia and about the same in Switzerland - all above board and taxes paid on everything). Timed a few major stock selloffs well and rebought at the troughs. Have generally held some bonds, but in relatively modest amounts - and mostly government inflation protected. Sold my businesses in 2011 and retired at 59 (surprising all of my friends and competitors who couldn't visualize how a workaholic like me could just turn of the switch). I never looked back and have resisted all temptations to open new businesses - and now we travel between 6 and 10 months a year.

Current assets break down to about 35% stocks (55% of which are in foreign companies), about 7% bonds (all are US/local government, more than half are inflation protected, about 1.5% precious metals and the rest is in cash or equivalents. While obviously subject to change without notice, assuming a Santa Claus rally, I expect to sell at least half of my US equity holdings and make believe I'm Warren Buffett (and try to by the dive).

While, other than traveling, we live pretty frugally, our balance sheet has generally grown at greater than the rate of inflation.

The major takeaways are:

1) There is a large leap that a business owner has to make between working for a living and running a business (which is an organic malleable entity).

2) Making saving a habit pays off big-time over your lifespan

3) Know your financial pain threshold and stay far away from that edge. Mixing emotions with investment is a bad financial decision.

4) Listen to others - they may have wonderful ideas. Not all ideas of even your brightest acquaintances are good ones - do your own due diligence.

5) If you can't explain a concept to your wife (whether it's credit default swaps or cryptocurrency or whatever), move on to something more easily understood.

6) If maximizing profits means increasing the risk, make sure you can handle the heat if things go into the weeds. Optimizing and maximizing are two different things.

7) Life should be fun - once it feels like you are working for a living, rather than playing an enjoyable game, it's probably time to think about doing something different.

Jeff

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