How Rising Yields Should Affect Asset Allocation for Retirees, Preretirees
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- เผยแพร่เมื่อ 2 มิ.ย. 2024
- Financial planning expert Michael Kitces weighs in on whether higher bond and cash yields suggest that retirees and preretirees should hold more in those asset classes.
00:00 Introduction
00:28 Higher Yields and Asset Allocation
Credit-Sensitive Bonds
How Does Inflation Affect Asset Allocation?
TIPS and the Bond Market
Our guest for the video, “How Rising Yields Should Affect Asset Allocation for Retirees, Preretirees” is Michael Kitces. He is a financial planning expert and the head of planning strategy for Buckingham Strategic Wealth, co-founder of XY Planning Network and AdvicePay, and is the Chief Financial Planning Nerd for the advisor education platform Kitces.com and the Nerd’s Eye View blog.
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Michael Kitces is always worth listening to. Thanks for having him on!
Yes, very smart guy and I appreciate you putting him on. More discussions with Michael would be appreciated.
Very enlightening. Great guest.
Learn something each time I listen to either of you, thank you again.
Great content. I've been wondering about this lately!
I'd love to hear what Michael Kitces says are the conditions under which an investor should change his allocation between stocks and bonds (assuming this personal circumstances are changing). Formula rebalancing is a possible answer, but maybe Michael has a better idea.
Does a bond tent expose one to Sequence of Price Risk in the same way that the stock valley mitigates against Sequence of Returns Risk?
I see a lot of passive investing gurus are saying for UK resident investors the barclays Bloomberg global bond index is a good fund to use as your bond portion of your portfolio. I think it's something like 60% government bonds and the rest investment grade corporate bonds across the mostly developed world. So largest portion US, Japan Developed Europe and UK, maybe some Australia and Canada. Do you think this is a good bond strategy. I think the overall duration of that index is about 8 yrs
Not all inflation is equal. What is the inflation for what you are purchasing?
If you listen to MK carefully....a simple portfolio is fine. There is a cost to complexity. This is why Vanguard and long term Boggleheads recommend a simple portfolio approach. The key is to invest early in life so your portfolio is large enough to do the job without trying to stretch you Safe Withdrawal Rate, when in retirement. If you have not saved enough you will be tempted to take risk and lean on whistles and bells that really don't do that much. Remember "Money Doesn't Grow on Fees".
Every 5-10 years, the stock market drops 10%-20%. If an investor is not going to change his allocation between stocks and bonds during those bear markets, then changing his allocation when rates are rising (or falling) is not going to happen.
Is it just me or does it look like Mr. Kitces has lost a few pounds? He looks good!
Here’s what I learned from this segment - Kitces loves to hear himself talk, taking considerable time to express something that could be said much more succinctly. As for his ideas, how about having Zvi Bodie on your show to critique them?
It was pretty duh...