100% Stock Portfolio--Is it ever a good idea?

[@stevenblackthorne4790]

"The best thing money can buy is financial freedom." You have the best closing slogan in the business.

[@adrianb6073]

Great video! Thank you, Rob. Here is something for you to think about. Looks like the paper objectively says 100% equity was the safest as well as best performing (3x?). The best of both worlds! If you listened to the paper and simply didn’t allow yourself to “watch the market” there would be nothing to react to and therefore nothing to cause you heartburn and stomachache. Jump in 100% equity, an go find another retirement hobby. This hobby is costing you money! Realize where the problem lies (in our heads). I’m in retirement, 100% equity. My 86 year old mother is also 100% equity. One way to get to 1-2% withdrawal rate is to invest optimally.

[@GodfatherInOhio]

i'm 66. i am being told by advisors to go conservative. BUT! my target expiration is age 92. So, if all goes as planned, i have 26 years left. So, i'm going all in with a weighted S&P500 index fund that's returned a 16% annualized rate of return over the past five years ... with -0- fees. I'm still in my "prime earning years", investment-wise. When i hit 86, then i'll go conservative. So, my closing slogan is: "The best way to protect my wealth is to grow my wealth!" 'Nuff said (Stan Lee)

[@translumination2002]

That last paper your presented was profoundly. So a static 60/40 or just 100% stock portfolio in retirement gives the best chance of success for lasting 30 years. It's also the two most simple to do. One involves rebalancing & the other one a really strong stomache. Thanks so much for your insight.

[@TheRothschild770]

The stock market is definitely picking up pace right now, but I still think investors should be careful at this time. I'm actually a newbie in this space, so I'm open to hearing other investors' take on this.

[@glen7999]

I ran 95%+ equities during my work life. Just entering retirement. Last few years I have been trying to diversify. Now down to 71% equities, 14% real estate(not home), 7% cash/CD's (but mostly cash now, CD's don't pay much), 3.5% BTC and rest in metals. I've looked at bonds but have a concern of risk with little return. My equities are a mix of index funds and some stocks from aristocrat list. Plan to start SS end of next year at FRA at with point will pull 3% to 3.5% from portfolio. Oh just recently subscribed and watched dividend talk.

[@frankofva8803]

Rob, you are a great teacher and I appreciate how you explain things simply and clearly.

[@jesuslives316]

I need an 80" TV to see all those small numbers. :-) Love the channel!

[@bdwolf3638]

Since the last 40 years was a bull market for bonds (falling interest rates/rising NAVs), I look forward to the video you mentioned about 60/40 portfolio in low interest/rising interest rate market. Thanks for the EXCELLENT content in your presentations.

[@PM-oe5mk]

What percentage to allocate to stocks vs bonds in retirement depends on several factors as far as I'm concerned. Since SS and a pension will cover almost all my retirement living expenses, my need to draw from my portfolio will be minimal. This will allow me the choice to have a higher stocks to bonds ratio if I want to. However, having the choice is not the same as having peace of mind. My risk tolerance is not super high, so for me it makes more sense to keep my portfolio closer to 70-80% stocks in retirement. My intention is to have money leftover when I die, not the biggest pot I can accumulate.

[@berg8970]

I'm in a similar situation as you are. I plan to have two years of supplemental semi-liquid income in laddered CDs and money market accounts to ride out any unforeseen dips in the market, should I need it durring that time.

[@DavidEVogel]

Young people are asking "What is a pension?"

[@jmc8076]

@@DavidEVogel And will until they are the older gen and blamed by the younger for something. Tradition. 😉😂

[@deerhunterthom5458]

Then draw from that big nest egg and have fun!!!

[@mere_cat]

Thanks Rob! That paper by Javier Estrada was very helpful. I downloaded it for safe keeping!

[@trevorpennington924]

“The best thing money can buy is financial freedom.”

[@tamib64]

We're about 85% equities. It's done amazing by us for 30 years. When the market was down we plowed money into our home equity. But consistently the stock market has performed well.

[@ds5398]

when the market is down is when you want to pile in :)

[@tekootianderson]

Your book was a very good read. I 'm a fan of stats and numbers. Great video showing different scenarios.

[@travisharrisphotography]

Rob, starting now at 41 years old. Just setup my Roth, and for now I put $6k into VOO, and after the new year going to put another $6500 in (to get going as fast as possible) then in '24 will likely contribute monthly. I am late to the game here. I feel like I need to be pretty aggressive in order to have anything in the end (at my current age). So, I am really thinking about just stock indexes. If I go 30 years, I will be 71. Very stressed out trying to figure this all out.

[@glasshalffull2930]

Better late than never! Wishing you the best of luck! Investing 100% in the S&P over the long run is the smartest thing to do. Just keep contributing and NO trying to time the market if there is a correction. Timing the market almost never works.

[@thetruedealio8792]

I love your saying: " the best thing money can buy is Financial Freedom." Here is what I'd like to see you analyze. I have a 100% stock portfolio. 80% is in typical funds like your 3 fund portfolio. The only difference is that I replaced the 20% Bond fund with select dividend aristocrats and kings that pay 3 to 4%. And I have an emergency fund that can augment a down Market for two years, using the 4% rule

[@dmitry7908]

Your emergency fund is being held in short-term bonds or cds?

[@thetruedealio8792]

@@dmitry7908 my emergency fund is split into three categories: 1. CDs 2. Treasuries 3. Money markets Pretty much equally distributed. But since I commented years ago, the emergency fund has grown significantly because I'm hesitant to invest in a bloated Market. And the three above are paying good interest at over 5%.

[@timexironman1]

I have a military and government pension. I’m sticking with 100% S&P 500 index for the rest.

[@quantumperplexity]

Here we are now in 2023. Bond yields are way, way up! This was unforeseeable by most analysts when this wonderful educational video was made back in 2021. So just like with stocks that go up and down, bonds do too. One things for certain, there is no certainty and our economy continues to be dynamic and unpredictable. This is why I love these statistical studies coupled with diversification.

[@cernousekpetr]

Rob, thanks a lot for all your efforts. I love your videos. They are simple, yet extremely interesting with very easy-to-understand explanations.

[@Gary-ib8dz]

Thanks for this video Rob. I'm pretty sure that I watched this video shortly after you made it. I forgot that you referenced that paper by Javier Estrada. I stumbled across that paper last summer and wondered what your thoughts were on it. I'm glad i rewatched this. The part that doesnt make sense to me is that 60% and 100% stocks beat 90%, 80%, and 70%. I would have thought it would all go in order from 100-60% stocks or 60-100% stocks...but I guess I dont have to understand that part.

[@psoidonym2389]

Interesting analysis, Rob. I'm currently contemplating exactly that. I'm hitting 60 this year and plan on retiring next year. Going from saving to spending is one thing. What to do with 100% stock allocation is another aspect. 100% stock has been fine through the years and I'm pretty able to stomach some volatility. But that might change getting older. I haven't decide yet how to go about it. But thx for the interesting discussion an links on this video.

[@kamumma1]

Love your videos! Just found your KZbin channel and appreciate your straight forward and research backed info. Thank you for all your work!

[@auricgoldfinger8478]

This is the second time that I’ve watched this. It is a brilliant presentation

[@BryanColliver]

good video i will be 100% in stock but you did give me something to think about. with me planning on dividends for most if not all my income for retirement.

[@HonestOne]

What I noticed with bonds is that they don't appreciate and are often low yield. Does it matter if stocks drop in appreciated value if the bond never appreciated. Most of the stock value over time is growth?

[@briantodd4887]

I’m 54, semi into retirement… and wanted to ask why invest in bonds IF a cash management account ( ex Fidelity SPAXX) offers a 4.30 % rate of return? Bonds don’t generally offer that high of a rate. Yes, the cash management account is variable, but aren’t bonds as well?

[@Acton65]

Great overview Rob. Thank you. Appreciate your channel.

[@MeltingRubberZ28]

Would be curious if you added 2023/2024 to this now. Would think the 25% growth each year would make a big difference.

[@LegoStarWars217]

Great topic , this is what I always running about. Good research too. Keep them coming

[@sprattmann4541]

MCD is a great bond proxy. It's basically a REIT without the REIT, a bond without a negative return.

[@vanguardvaluist2614]

100% equities make sense for people who have pensions, are still "working" in some aspect and thusly have income, low expenses and no debt with a 2-3 year allocation of cash or cash equivalents or rental incomes.

[@paulthorpe766]

Good stuff Rob. I think other asset classes as well as bonds worth risk-split as you get older are the following - they have a very nice capital gain offset eg most are treated as 'Wasting Asset' dispite going up in value SO NO CAPITAL GAINS - Vintage Cars/bikes, wine, art, watches, vintage Gibson's/Fenders, furniture, antiques etc is worth 25 % punt of your holding too as you get to post 55 yrs of age, but it requires the Gladwell 10,000 hrs of knowledge on each to be clued-up granted !

[@nicholasmartinez6043]

If you have no debt in retirement, have 18 to 24 months of cash, and can live off 3-4% of the portfolio but adjust lifestyle if necessary, than absolutely you can go 100% stocks. Live and pay bills off the dividend and sell another 1-2% per year for lifestyle. In a crash, just adjust the lifestyle.

[@robertmccullagh6251]

Loving these no nonsense videos. Thanks for the info Rob!

[@allenlane5000]

Excellent video Rob, and thanks for the link to the glidepath paper. I agree that 100% equities is the only way to go......that is except for a couple years in Cash/CD/ST T's for near term expenses. Oh wait, that would put me about 90/10 ! Great minds......... A consideration for future topic. Since most retirees will have most of their saving in pre tax accounts, what are the most tax efficient options for using a large chunk of those funds for say a vacation home, or RV....or whatever. Very hard to get a loan with no cf's, and you can't take loans agains IRA's or other pretax savings, and those marginal brackets can take a huge bite out of the withdrawals. Appreciate your consideration.

[@davidrogers0717]

Totally agree Rob. I think the right mathematical answer in the research may point to stocks, but yes one does have to sleep at night so maybe 60/40 mitigates the two?

[@johnford5568]

I decided years ago to hover around 60/40. Yes I've given up some returns but as time goes on, I like how the 40% locks in more and more as I get older. For me its a forever ratio. The main thing is savings rate, not returns. You have to have money invested for this issue to even be an issue. Of course, invest at the lowest cost possible too.

[@CaptainBenjamins]

Do you mind telling us how old you are when you made the switch to 60/40? Any advice?

[@johnford5568]

@@CaptainBenjamins I was about 45, 60 now

[@brianh6680]

Am 12 months out from retirement and have been building up a CD ladder that will hold five years of living expenses when combined with social security. Average market downturn is under a year, and average recovery is under two years. This buffer allows the rest to remain in stock well above the traditional 60% level. I think the main problem with any percentage based rule of thumb is that it ignores concrete requirements and may over/under account.

[@eos6984]

Great video. Thanks for the information. If the odds are against a gambler, in the long run the gambler will lose regardless of the bet pattern. If you believe that stocks will provide a greater return than bonds or cash, (the data in your video supports this position) then no matter what allocation weights or scheme you employ, your total return will be less if you use cash or bonds. The cost of using cash or bonds is the stock return (100%) less your reduced return because of including cash and bonds. So am I saying all portfolios should be 100% stocks. No, not necessarily. I am saying when you use cash and bonds ask yourself 1. What specifically am I buying and 2. what is the cost? For example, in the video stocks returned about 10% and bonds about 6%. So if you have a 60/40 portfolio, your expected return is 8.4%. That means it cost you 1.6 % of your investments. What are you buying? Assume a 40% decline. 100% stocks a 40% decline. 60/40 portfolio, 24% decline. Say there is a 40% decline every 5 years, that means you will pay 5 x 1.6% = 8% to suffer a 24% decline instead of a 40% decline.

[@darrelvaldez9455]

Aggressively investing in stocks (Long Term), I am by no mean a daily trader nor i plan to let go or sell under 1 year. SS is bonds and should be around 12-1500 a month after 62. I am 33, I am taking the "risk"

[@davidrounds3245]

I often think the best thing I could do is just put 100% in Vanguard Wellington (60/40) and never worry about it again.

[@larryjones9773]

But you have to sell stock in a down market. Wouldn't you want to have your bonds & stock in different funds? This way, you can sell from your bond fund in a down market.

[@diydad5067]

@@larryjones9773 I think the wellington fund is self balancing, no need to rebalance every year or quarter.

[@GrumpyOldMan22]

I truly appreciate your insight, thank you.

[@limobob100]

I am 100% stock however some funds have bonds like Vanguard Wellington that will give me 3.06% to bonds. I fund my expenses from dividends and SS along as the portfolio earns between 4 and 6% all is well. The ups and downs in the market are not that important as long as the dividends continue to be paid and you are never sure about that AT&T. I am 76

[@rpguitar]

The most interesting part of the talk (today's low bond rates) is in the final seconds, but it draws no conclusion - because we are stuck analyzing only historical behavior! It's such an inherent weakness of approaching wealth management as a "science." All of the studies that used past decades to draw conclusions are great, but they fall flat in trying to predict what's to come if interest rates stay low for a long time, and then negatively impact existing bond portfolios when they eventually rise. My armchair analysis is that it makes sense to almost completely ignore bonds until rates rise enough to free up some "space" for them to breathe a bit. I'm currently about 96/2/2 (stocks/bonds/cash) at age 54, just recently retired with a 2.7% WR.

[@rob_berger]

The tough question is at what rate do you buy back into bonds.

[@rpguitar]

@@rob_berger Indeed, I agree that is the conundrum. In my case, bonds are in my IRA, and I have 5 years til I can use that money easily. So I'm going to wait maybe 2-3 more years before seriously ramping up the allocation. I think by then we'll have a very different rate situation. (How could we not? But of course, who knows!)

[@219garry]

I've debated on this. I think it comes down to your cash flow outside of stocks. Be it a pension or your social security or perhaps rental income. You have to NOT need your stock money for anything in order to go 100 pct. One guy i know did it by keeping 5 yrs living expenses in cash.

[@donniemoder1466]

Some people have equity in real estate, an expensive home or a second home to balance their portfolio of stocks.

[@jmc8076]

The % in lost opportunity (returns) from portion sitting 5 yrs in cash/GICs etc would need to be calculated for accurate analysis of the portfolio.

[@ljzmudzinski2807]

I know a diversified portfolio will generally include exposure to non-US equities. I feel like non US equities have underperformed US equities for years now. Why bother with Int’l? Am I waiting in vain for the time to come for Int’l? How much difference does it really make?

[@lifeisgood070]

Thank you for digging into low bond yields I’m really excited to watch what you find!! That’s been the biggest thing on my mind for a long time. In my mind bonds only average 6% because there were a few times they were like 15 to 25%…. But from like 2010 to now it’s been 2.5 or less it feels. Unless you’re an accredited investor and you can invest in a really low quality bonds with >7% yields

[@ManjitSandhu]

Hi Rob I am a new subscriber and loved the few videos I saw. thanks. Have a quick question. If I, a retiree, have a 20-stock portfolio and need to sell stock(s) for expenses which one should I sell first; one with the largest gain or one with the smallest gain??

[@thomaslee7189]

Someone said he considers SS benefit as bonds, so invest everything in stock.

[@darrelvaldez9455]

correct

[@lisadowling6047]

That was Jack Bogle who said that about SS. I will have a teachers pension and I see it as bond-like as well.

[@DavidEVogel]

My SS check is $1068. Oh boy let's party.

[@johnbrown1851]

@@DavidEVogel git er done 😎

[@gilbrook]

Thx for link to Estrada paper. 30/70 glide path is cash cow. Does wonders for good night’s sleep.

[@yourportlandlifestyle2907]

What that calculator probably does not take into account is dividends, which compound unlike bonds. if you used SPY as the stock portion from 1999-2018 the returns with divs total return is 217% versus a 168% return without. That is a big difference. Do you know if the vizualizer takes the total return into account or not? BTW I was watching this to see if I should rethink my portfolio to include more bonds. Given that my average dividend growth rate is higher than the bonds I can buy ... I think I will stick with that and I love the part at the very end! I might rethink that if bonds top 7.6 like they were in 1976

[@stevelee7781]

Back in '08 a 60 yr old coworker told me his wife & him were up all night discussing his all stock portfolio. They had watched their one million dollar portfolio drop to 500k and wanted to sell.. BTW, he had tears in his eyes. I begged him to hold on as the market has to be bottom.. I was wrong as it dropped another 10%. Always wondered if he stayed the course.

[@suzanneemerson2625]

When you’re allocating assets in your portfolio in retirement, how do you factor in a six figure guaranteed government pension, adjusted for inflation, that you can very easily live on?

[@Gary-ib8dz]

I think if you can easily live on your pension, you go 100% total stock market or a mix US/international if that is your thing.

[@mikeabuckner]

Great video. Thanks. Look forward to any perspective on asset allocation with current low bond yields mentioned late in video. I’ve seen many videos /articles on historical performance…but what should a retiree expect (and how to invest) going forward with the current yield situation?

[@DavidEVogel]

Your risk tolerance is unique. With you depend on selling assets from your retirement portfolio for a positive cash flow? If the answer is yes, than you need a portion in fixed-income securities.

[@samryan7954]

Berkshire-Hathaway stock is my largest stock holding in a 100% stock portfolio. I think I'm good.

[@seattledan]

I’m confused on the types of bonds whenever someone mentions this. Is it treasury, corporate, junk? It makes a huge difference when we talk about diversifying in bonds.

[@JayCalderon211]

Thank you, Rob

[@johnbrown1851]

Withdrawal strategy could affect the outcome of a mixed portfolio a lot I think. When you sell off an asset is as important as allocation.

[@markmorris2517]

Rob, thanks for another great video and knowing how to teach me about things I don't even know to ask about. #Glidepath

[@damienbates]

I’m all in at 100% stocks, but when I retire at 55 in 2030, my pension will cover 100% of my expenses. Otherwise, I’d be in at 70/30. It’s nice to have guaranteed income to support retirement. Just pray my health will hold up for many years to come! Honestly, never imagined I’d be in this position. I’m so grateful for the compulsory pension, especially in my early years with children. It was a financial struggle but we made it through those years contributing to our pensions the whole time.

[@Stocks1986]

If someone had enough SS & Pension that covers expenses & needs & the portfolio is used for wants and self insuring LT Care - would it make sense then to do 90/10 or 100% stocks?

[@Mekias]

I'm in a similar situation with a secure pension that, according to my work's pension calculator, should be enough to live on in retirement. I'm 12 years away from that and am still in 100% stocks. At this point, I'm probably going to stay in stocks. I think you'll want to make sure that (a) your chance of retiring from that company with many years of service is high, (b) the security and stability of that pension is really good, and (c) the pension + SS is enough to live off of in the future.

[@darcysalmon7781]

Well... agree... If one has SS, Pension, 2 homes, good health ins and about 4 years of cash (just in case), then a 100% stock portfolio is actually a reasonable fraction of a persons entire estate. And add on a 2 or 3 decade retirement... that is a lot of time to not take advantage of the market. And of course... as long as you are comfortable with market fluctuations... interesting.

[@johnlittle8267]

I was going to say I have never made money on holding a bond fund. Granted I haven't had it in the right periods and for long enough, but I think that shows how much has changed from the times where you could get a CD paying 6 or7% and that is reflected in historical results and probably his monte carlo. I am thinking 75% or 80%' equities for me. Right now I am at 70% stock including retirement and non-retirement funds, and I think I'm too low in stocks. That is several years more than 2 in cash and feels like too much.

[@Unsilentmajority-1]

Rob. Currently 2023. Interest rates in a high yield savings is currently at 5%. Has your opinion changed at all?

[@pawnmove]

Using historical bond data from when interest rates were higher and declining to drive decisions for today when interest rates are near zero and possibly poised to increased seems like a flawed methodology. I am a young-ish retired guy (50s) and my strategy has been to keep investments in equities + REITs while holding two years expenses in fixed income. Is there a better methodology to compare different allocations?

[@Jack51971]

Buy and hold...time is on your side...

[@CaptainBenjamins]

100% stock allocation is a perfectly fine portfolio. It is the safe withdrawal rate that comes with it that messes people up. 3% will last forever. So if you have say $5mill invested and can live on $150,000 the first year, then you are good to go and will leave a legacy to your choldren

[@kevinbarrett3706]

Nice analysis; good job .

[@leomortimer2565]

My first question would be what "stocks" did vanguard use when they put together these different ratio portfolios? Not all stock portfolio are create equally. That's like saying a Kia Chrysler is equal to a Toyota, after all they're all cars.

[@leomortimer2565]

For the 60/40 portfolio in retirement what were the stocks eft/mf and what bonds? Was it VTI & BND? OR VTI & VXUS for the stock and BND for bonds. Love your videos and appreciate your teach of the portfolio visualizer. Can't tell you how many hours I spent playing around with it. very fun and interesting.

[@deplorable7575]

I'd think you'd do well with 100% in ETFs like SCHD. And just live off the dividends with no draw down

[@BangNguyen-ux4ie]

If a person has all of his/her living expenses covered by pensions and social security, isn't that a case for near 100% in stocks? Because he/she needs to withdraw very little from the portfolio?

[@roobear5357]

Indeed, there are folks whose cost-of-living is only 50 or 60% of their fixed income from pension and ss. Of course, the continued viability of pension and SS could be an issue going forward. But let’s hope not.!😅

[@Magdalene777]

If you have dividend stocks you can buy shares with the dividends when the market is down.

[@markmccarren827]

Very interesting. As you mentioned, I'm looking forward to understanding how your "near retirement" analysis may change based on the current interest rate environment.

[@DavidEVogel]

based on the current interest rate environment. Doesn’t matter. If you are comfortable with a portfolio of 80% equities/20% fixed-income securities then stick with it. The return of fixed-income securities is trivial.

[@450Chicago]

What is that investment projection program you are using?

[@David-fv7zg]

Rob, I have been listening to the Dough Roller for years, and can't believe I am saying this, but I love this format along with the blog site even more. I have a question that I have not heard asked before that I think you are the only person that can answer succinctly. Get your tables and spreadsheet warmed up... Can you discuss the rate of return of someone taking social security early and investing the funds in a 3 fund plan (or some variation), or with average S&P return as opposed to waiting for standard retirement or even waiting for maximum benefit. I am thinking taking the money early and investing it with an average rate of return of 8% - 10% would win out, but Im curious about your thoughts. Let's assume the money is not needed for retirement immediately and the funds will not be used until age 70. Ultimately, my question is.....Does it make more sense to take the benefit early and invest 100% of it averaging a rate of 8% - 10% until age 70, or waiting for the maximum benefit at age 70. At age 80, what would have made the most sense? Thank you, Dave.

[@CalmerThanYouAre1]

If you take the money and invest it, you’re going to pay taxes on it. If you defer, you’re getting tax-free growth at about 8% per year and cost of living adjustments on top of that. It usually makes the most sense to defer; however there are a lot of factors to consider such as your health (odds you’ll die before break even) and retirement tax bracket.

[@ph5915]

Yeah, I struggle with this. I'm in a period of not in the workforce but pre-59.5 and have now about a 70/30 split with the now 30% being MYGA Annuities (function as a CD). The MYGA's payout better than bonds and are separate from the markets (annuities are a contract with a life insurance company) but they are basically "locked-in" for 3 yrs. I suppose in 9 months when my 3 yr MYGA's are up, I will carve out some of that in a liquid account to have @ 59.5, bonds/bond funds just don't seem appealing to me, and they are also volatile...

[@rob_berger]

Curious what the term and rates are on your MYGA annuities.

[@ph5915]

@@rob_berger In April/May of 2019, the 3 yr MYGA's I got were paying 2.6%. Might not sound like much, but it was better than inflation (until recently) I believe. I could peel off 10% of the principle each year and interest (but didn't). It was nice, during the crash in March 2020 when equities and bonds went south, the little MYGA's were still adding their daily dribble every day. Since then I've found out about Stan the Anuity Man, and he shops all carriers. Currently, the best 3 yr he has shows as 2.30%, 5 yr @ 3.00%...

[@donniemoder1466]

What about this? Some bonds are going negative. The Fed may not raise interest rates in the future. Bonds may go down with stocks like early 2020. Cash could be better than Bonds. You are relying on 100 year old info, bonds could be at tipping point of start of a downtrend after a 40 year upturn.

[@14goldenjay]

the only time bonds pay off is if you happen to invest a lump sum right before a total market disaster which is very improbable....dont invest with the 1 percent scenario in mind it will cost you dearly...1929 and 1999 only happened twice in 120 years

[@adamstaley5093]

What do you think about a leveraged portfolio with hedges instead? Something like 60% UPRO and 40% TMF. I think the growth would be better, but possibly a bit rockier of a ride.

[@lw9936]

Hi @Rob Berger, if interest going up, stock market and bonds may go down? What do you do with your portfolio? Any adjustment? thanks

[@luisoncpp]

Something that bugs me is that financial planning tools use historical records to estimate returns of both stocks and bonds, however with bonds we already know how their future performance is going to be, so we shouldn't be using historical returns of bonds to make estimations.

[@mattcramer9187]

Great video, thank you

[@8G00SE8]

The problem with everyone ignoring bonds is that businesses will no longer be able to raise money using debt, as nobody will buy them, forcing yields up and reverting to the 6.1% average.

[@wwz1011]

#1 question, do you have the stomach for a 40% or even 50% drop? Most people think they do, until it happens. Dow went from 14,198 to 6,470 during the financial meltdown. I retired early, six months before the financial meltdown. Several of my friends sold at or near the bottom, locking in their losses. Over my working career investing, from 1978 to 2007, 95% stock worked out well. Fortunately, I did not panic in 2008/2009. You should have a healthy cash cushion so you don't have to sell at the bottom. Similar to below, I consider SS and pension income as fixed income.

[@DavidEVogel]

Very true. Mom and pop will bail out of equities during a multi-year bear market.

[@Larrythe65]

I'm 56 and been retired for 6 years and I'm 100% in equity.

[@dr.g3860]

I also retired at 52, 5 years ago, and am 100% in stocks.

[@DicksonMaimouth]

@@dr.g3860 My wife and I plan on retiring at 55, in about 5 years, and we’re planning on going that same route. If you’re in solid companies and/or a good S&P or total market fund, you likely have very little to worry about (I’ve trained myself to take advantage of those periods when there’s “blood in the streets,” a complete psychological adjustment). The bond market is horrible right now. I moved any money we had in bonds over to stocks and our portfolio has thrived. I’ll keep my eye on it and adjust as necessary.

[@andrewchen3151]

@@dr.g3860 I’d like to retire early around 50. What do you do with your time?

[@larryjones9773]

I'm 60, retired at 48, and my asset allocation is 97% stock index funds, 3% bond index fund.

[@gorambo]

@@andrewchen3151 I'm 56 and retired at 53, to answer your question it's easier to say what you don't do, I don't go to work. I wake up when I want and do whatever I fancy that day. I moved to Europe and travel and spend time with family. A boring day in retirement beats any day at work. There's so much to do but you can't imagine till you have time to start imagining.

[@mattehlen1079]

Do you have a opinion on including a high cash value life insurance policy in plans with the idea of drawing from the policy on down market years and repaying loans on better years. Caviot high pua policies yieldi 4 to 5 percent long term

[@Gary-ib8dz]

I think cash value life insurance plans are almost always a bad idea. If you are considering one, I would talk to a fee only fiduciary advisor you trust. This would be someone that would not make any more or less money if you buy a whole life policy. I don't think most people should need any or very much life insurance in retirement. If you do need/want life insurance, I think term is almost always better.

[@genglandoh]

I think we will do 90% stocks and 10% cash (2 buckets) The stocks will be 1/2 in Growth ETFs 1/2 in dividend ETFs If the market is down for 3 years we are covered with the 10% cash (10% is about 3 years in GO GO years spending) If the market drops for more then 3 years we will reduce our spending and use just the dividends. This is my way to sleep well during a market downturn. PS We have reduced our cost of living so if we have to we could live off of just SS.

[@rightshotphotography2576]

Everyone seems to be ignoring bond basis risk. There is very little analysis that looks at buying bonds where interest rates are almost NOTHING, to increasing interest rates over time. In that scenario bond values decrease. There is a very real concern that bonds and stocks BOTH could take a hit in an increasing interest rate environment! My personal plan (7 years from retirement) is to heavily diversify - equity index funds, international equities, gold, REITs, dividend stocks & funds, etc. along with holding some cash 10-15% on the side. Ultimately, bonds only pay a tiny amount over cash, but carry more risk!

[@Summerdee223]

Well one year later your concerns appear to have been valid.

[@jmc8076]

@@Summerdee223 It’s why holding longer term bonds in rising rates/higher inflation makes sense for any who want to hold them. Investing is more a black art then science.

[@ljrockstar69]

Does this apply to a 100% ETF portfolio or just pure stocks?

[@Gary-ib8dz]

I think stocks in this video refer to either the total stock market or sp 500. You can hold that in an ETF or a mutual fund/traditional index fund.

[@RothBalloon]

Question, isn’t social security basically a bond? Therefore shouldn’t that be taken into account when making that bond allocation. I’m thinking SS is probably about 20 to 30 percent and so doing another 20 percent bond allocation may be a little too conservative….just a thought

[@rob_berger]

Many have asked that very question, and I'm working on a video to address the topic. Until then, a question. Let's assume a $1 million portfolio and after SS/pension/annuities, etc., a retiree needs $40k a year from the portfolio. That's the 4% rule, and Bengen found you should have 50 to 75% in equities. So why should we follow that allocation? The study I mentioned in the video says 100% equities, but I wonder how many retirees, even with other sources of income, could handle the volatility.

[@RothBalloon]

@@rob_berger Great points and great question. I do get the 4% rule, but my statement was more along the lines of, if I live to see retirement, I will have been investing for about 25 years plus and my current allocation is 100% equites (pedal to the metal baby😃). So far I have experienced a few swings in the market and from what we have also learned, the markets will go up over tine however slowly that may be. So why should we have to scale back so drastically at retirement, as if our specific retirement date indicates slower growth going forward? I’m not advocating for no bonds at all, but I am saying that maybe psychologically we have been taught to run under the bed as soon as we retire, while at the same time, it has been proven that we do not have to. I sort of think that is why we are hearing the calls for the death of the 60/40 portfolio. But what do I know…I’m still learning. Either way, GREAT content! I found your channel a few weeks ago and love your content.

[@limobob100]

SS is more like an annuity income you cannot outlive, it shows up in my brokerage account every month without fail and actually get an increase annually

[@gcburkett]

I would think 100% except for some emergency reserves is fine in the early accumulation periods but it is easy for young investors to get nervous and change allocations in a 401k plan very quickly. I did this in a market downturn in 1990.

[@DavidEVogel]

True. Mom and pop investors sell during a bear market and may come back at the top of a bull market.

[@jmc8076]

@@DavidEVogel Not just mom and pop. All take their turn at that age and stage. If lucky.

[@SuperYova]

My goal in retirement is to be 100% stock portfolio *with* 2 years cash emergency savings in the bank to weather most downturns.

[@MerryHampton]

great video... been thinking the same thing. Recent subscriber and love your content,

[@franksatterfield9764]

If you look at the 10 year bond yield compared to the Fed target inflation rate you will see a negative interest rate.

[@davidwatson8642]

All of my equity positions are not for me, but for my children and grandchildren, so we're in for the long haul. I am retired and living off my military pension and social security. So, I am still 100% in stocks, with a hefty position in safe investments (money market)

[@RobotMowerTricks]

I'm MANY years from retirement, but right now my plan is to go into retirement with 100% stocks, and then convert to cash about 1-5 years of expenses depending on how "fully" I'm retired.

[@glasshalffull2930]

I hope you are in a S&P500 type fund. It has treated me very well over the last 23 years. Just keep contributing and NO trying to time the market. There will be ups and downs, but the market continues to rise over the long run. Best of luck!

[@meibing4912]

Great video! No matter what it is never - ever - IMHO good to have all one's assets concentrated in a single assets class. I do think a lot of people have too few stocks when they retire, but property should definitely be part of any well-balanced investment portfolio. Have 1/3 fixed income (a large part of this is in reality stocks), 1/3 property and 1/3 stocks. Fixed income lets you avoid selling in down-markets, stocks give the best returns, property is a great inflation hedge.

[@lw9936]

@Rob Berger thank you again for a another good topic I need. Do you have any information about how future rising interest could impact REITs etfs, like VNQ? thanks!

[@NotThatKraken]

I wonder about strategies other than buy and hold. Would a strategy that is 100% stocks when the fund is above, say, its 180 simple moving average and 100% bonds when stocks are declining (below the 180 moving average) does better or worse than a 90/10 portfolio?

[@QuadTap]

how about now that bonds seemed to have topped and started a new secular bear trend... 2021 looks to be pretty decisively the top for bonds

[@SC-sh6ux]

Do you think a future of low interest rates will change these projections? Thank you

[@rob_berger]

That's the question everybody is asking. It may very well, but I find it almost impossible to predict with any certainty.