This is essentially a 60/40 with 8% cash as part of the fixed income portion (60/32/8). Ive been doing this for years. Note-low cost funds. "Money Doesn't Grow on Fees".
Interesting. We sold all our American stocks and all our bonds in July 2021. Saved us some disappointment in 2022. In our IRAs, we invested about 35% of our portfolio in emerging market stocks (VWO) and non-US value (VTRIX). The stock funds are down, but we expect a strong return over the coming decade.
@@lifeisshort99 Surely you must have lost a lot of money selling bonds then. Was that in 2022 or 2023. Are you in passive index tracking funds, perhaps you could have just rebalanced and brought some more bonds at real lows, also bonds are paying more income now
This is an excellent video with a lot of actionable information and suggestions. I would think very carefully about any international investments. Many of those economies are fragile and subject to greater risks.
Ms. Benz is basically describing the “college endowment” model recommended by Christopher H. Browne in Chapter 18 of his Little Book of Value Investing (2007). I have read that chapter many, many times.
Unless you ultimately plan to liquidate your equities-bucket, at a pre-determined age, or stock market level..I don't see the difference between a traditional rebalancing strategy, and "bucketing".
In this video, is the reason you wouldn't sell bonds when they go down (like in 2022) because they might come back up over time? That's the expectation with the stock market, but don't bonds only reverse a loss if the fed reverses a rate hike? I understand being sad about the loss, but please help me understand why you would deplete cash before beginning to deplete bonds. Does anyone out there understand this well enough to explain it to me?
The sequence of returns risk advice is way off base. Why not a dividend portfolio that yields plenty of cash so shares won't need to be sold and can recover with the market?
Why are bond funds recommended? They are just bad performing equities. The dividends over time go down. What's so bond-like about that??? It's better just to buy real good old fashioned bonds or stock in Coca-Cola.
Always enjoy Benz and Mack, but lets get real. In the current market, etfs are mostly overpriced largeCaps and smallCaps are not doing as well as largeCaps. Investor fixed income needs vary widely and so there is no bucket scheme that fits everyone needs. What investors need is to know how many stocks to hold and in smallCaps versus largeCaps, versus cash and fixed income for preserving portfolio value. The largeCap etfs are all way overvalued while smallCap stocks are very reasonable. When the largeCaps return to earth, it will be smallCaps that show the most growth...
@@HermannTheGreat A selected set of smallCaps represents the same risk as one large cap and every largeCap started their lifetime as a smallCap. There is a significant risk in the 4x valuations of largeCaps over those of smallCaps and the idea is to hedge that risk.
@@themaazahmed All of the large investment managers are legit, but that does not mean that they give good investment advice. Poor advice can reduce market gains by more that the 1-2%/yr that investors pay for advice and so any advisor that does not advise to follow the market is not useful. If the first advice is to find your level of risk tolerance, you know that their advice will be to sacrifice rally gains to reduce correction losses. There is no risk in following the market but there is great risk in believing that there is risk in following the market…
ETF’s are overrated. “Highly diversified” portfolios are overrated. Christine is so old school and afraid to make a conviction. She could start reading Warren Buffett.
ETF's may moderate returns, but they also moderate risk. Maybe a fourth bucket would be good for riskier investments; that would be money you can afford to lose.
Outstanding interview, Q&A's Consuela, as always gets to the point, what viewers are looking to get out of the video! Many thanks for the rich content.
I still like Bugle's old rule, bond percentage to match your age. I only trust the 2 year Treasury going into a recession. Also, don't like the risk of stocks in general because the analysis tends to be wrong, hence the volitility (Meta). Last rule, don't invest in stocks because it is a bet when you can't afford to lose it when you may need it most - 80-95 yrs old. Buckets won't save you in old age. There is still too much money chasing stocks without regard for risks. (SVB)
A reminder: Warren Buffett’s instructions for his widow (should it come to that) are (1) invest 10% in cash or cash-equivalents, (2) invest the remainder in an S&P 500 index fund. The only caveat I would add is, now is not the time to buy an S&P 500 index fund; she should wait until prices drop.
Yeah..but Buffett's wife could LOSE 90% of her stock-portfolio value, and STILL be in the 1% of the wealthiest people, on Earth..so WHY NOT? Most people can't afford to potentially lose 90% of their net worth, when they are 80+ years old.
Very level headed advisor, I followed her bucket suggestions and seems to be working. I’m pulling from bucket one, and reinvesting dividends/interest at this point. I haven’t gone the TIPS route, which was better for me, given the Fed’s return to earth from the La La land of zero interest rates.
A Markowitz portfolio would help investors know the market risk and expected return via math, of their portfolio. Today's computer world makes them easier to build. Wouldn't a Markowitz portfolio be even more safe? The mathematical formula would say, expected ROR 13% and Risk 2% annually. Now this would be an optimal portfolio. That is the highest ROR with the lowest market risk(also known as the standard deviation of ROR), with a given portfolio. Do any portfolio managers use Markowitz Optimal portfolio analysis?
When Christine talks, I feel like I am listening to a person genuinely concerned about my financial well-being. Great interview Consuelo.
This is essentially a 60/40 with 8% cash as part of the fixed income portion (60/32/8). Ive been doing this for years. Note-low cost funds. "Money Doesn't Grow on Fees".
luv luv luv Christine Benz
I"m guessing you've read all her books
Great content as always
Thanks professor Mack. Happy spring. 😇👑🌏🌍🌎💚
I sold all my bond and went cash early last year and bought 5 percent CD end of last year. Loving it.
Interesting. We sold all our American stocks and all our bonds in July 2021. Saved us some disappointment in 2022. In our IRAs, we invested about 35% of our portfolio in emerging market stocks (VWO) and non-US value (VTRIX). The stock funds are down, but we expect a strong return over the coming decade.
U have to pay tax on that and it's t percent before inflation which is 5 percent so ur breaking even
@@gwalchirk2072 No tax for me. It's in tax differed account
@@lifeisshort99 Surely you must have lost a lot of money selling bonds then. Was that in 2022 or 2023. Are you in passive index tracking funds, perhaps you could have just rebalanced and brought some more bonds at real lows, also bonds are paying more income now
This is an excellent video with a lot of actionable information and suggestions. I would think very carefully about any international investments. Many of those economies are fragile and subject to greater risks.
Boy was I glad to create that cash bucket a few years ago per Ms Benz’s suggestion.
Good information. Rebalancing your portfolio according to the current market conditions will mitigate your investment losses.
Yay! We survived March!
Ms. Benz is basically describing the “college endowment” model recommended by Christopher H. Browne in Chapter 18 of his Little Book of Value Investing (2007). I have read that chapter many, many times.
Unless you ultimately plan to liquidate your equities-bucket, at a pre-determined age, or stock market level..I don't see the difference between a traditional rebalancing strategy, and "bucketing".
True!
Great questions n answers. Enjoyed the content
How? Avoid bonds. Simple. Bonds were a predictable disaster - rates had to go up and bonds were destined to be decimated.
In this video, is the reason you wouldn't sell bonds when they go down (like in 2022) because they might come back up over time? That's the expectation with the stock market, but don't bonds only reverse a loss if the fed reverses a rate hike? I understand being sad about the loss, but please help me understand why you would deplete cash before beginning to deplete bonds. Does anyone out there understand this well enough to explain it to me?
Happy anniversary !😂
The sequence of returns risk advice is way off base. Why not a dividend portfolio that yields plenty of cash so shares won't need to be sold and can recover with the market?
Why are bond funds recommended? They are just bad performing equities. The dividends over time go down. What's so bond-like about that??? It's better just to buy real good old fashioned bonds or stock in Coca-Cola.
Always enjoy Benz and Mack, but lets get real. In the current market, etfs are mostly overpriced largeCaps and smallCaps are not doing as well as largeCaps. Investor fixed income needs vary widely and so there is no bucket scheme that fits everyone needs. What investors need is to know how many stocks to hold and in smallCaps versus largeCaps, versus cash and fixed income for preserving portfolio value. The largeCap etfs are all way overvalued while smallCap stocks are very reasonable. When the largeCaps return to earth, it will be smallCaps that show the most growth...
SmallCaps won't be as competitive in a high interest rate environment, they don't have the moats and they won't grow as quickly.
@@steveagnew3385 Have your small cap risk, because it's a huge risk. Never met anyone who held small caps for their lifetime.
@@HermannTheGreat A selected set of smallCaps represents the same risk as one large cap and every largeCap started their lifetime as a smallCap. There is a significant risk in the 4x valuations of largeCaps over those of smallCaps and the idea is to hedge that risk.
I'm looking a real and legit investment company please tell me
@@themaazahmed All of the large investment managers are legit, but that does not mean that they give good investment advice. Poor advice can reduce market gains by more that the 1-2%/yr that investors pay for advice and so any advisor that does not advise to follow the market is not useful. If the first advice is to find your level of risk tolerance, you know that their advice will be to sacrifice rally gains to reduce correction losses. There is no risk in following the market but there is great risk in believing that there is risk in following the market…
Hard to follow.
ETF’s are overrated. “Highly diversified” portfolios are overrated. Christine is so old school and afraid to make a conviction. She could start reading Warren Buffett.
Buffett: Don't lose money.
WB’s rule: do not diversity based on what he is doing now.
ETF's may moderate returns, but they also moderate risk. Maybe a fourth bucket would be good for riskier investments; that would be money you can afford to lose.
@@hightide4782 yes but not enough to make his own portfolio
Gold and Silver ...is a must
Vbaix
Outstanding interview, Q&A's
Consuela, as always gets to the point, what viewers are looking to get out of the video! Many thanks for the rich content.
Seems no one gets a commission with treasury direct, so it’s not recommended.
Nice! Thanks for breaking it down 👍
Great interview. Great ideas. Will her new book be available as an audio version?
Wow interesting
Hi ma'am
I'm looking a real and legit investment platform
Can you tell me
I still like Bugle's old rule, bond percentage to match your age. I only trust the 2 year Treasury going into a recession. Also, don't like the risk of stocks in general because the analysis tends to be wrong, hence the volitility (Meta). Last rule, don't invest in stocks because it is a bet when you can't afford to lose it when you may need it most - 80-95 yrs old. Buckets won't save you in old age. There is still too much money chasing stocks without regard for risks. (SVB)
Bond % to match your age is too cautious, especially when younger.
A reminder: Warren Buffett’s instructions for his widow (should it come to that) are (1) invest 10% in cash or cash-equivalents, (2) invest the remainder in an S&P 500 index fund.
The only caveat I would add is, now is not the time to buy an S&P 500 index fund; she should wait until prices drop.
Yeah..but Buffett's wife could LOSE 90% of her stock-portfolio value, and STILL be in the 1% of the wealthiest people, on Earth..so WHY NOT? Most people can't afford to potentially lose 90% of their net worth, when they are 80+ years old.
Christine tells it straight! Good interview 👍
Very level headed advisor, I followed her bucket suggestions and seems to be working. I’m pulling from bucket one, and reinvesting dividends/interest at this point. I haven’t gone the TIPS route, which was better for me, given the Fed’s return to earth from the La La land of zero interest rates.
👍👏👏👏👏✌️
Always a great guest. This channel just keeps getting better and better.
A Markowitz portfolio would help investors know the market risk and expected return via math, of their portfolio. Today's computer world makes them easier to build. Wouldn't a Markowitz portfolio be even more safe? The mathematical formula would say, expected ROR 13% and Risk 2% annually. Now this would be an optimal portfolio. That is the highest ROR with the lowest market risk(also known as the standard deviation of ROR), with a given portfolio. Do any portfolio managers use Markowitz Optimal portfolio analysis?
If you look at her bucket portfolios. They didn’t do any better that the 60/40.