Part 1 of 2
retirement planning is challenging, and the biggest fear is not having enough money during retirement. The year 2022 made things worse as even a well-diversified portfolio did not spare anyone from pain. Bonds, which are supposed to offset the risk in stocks, experienced their worst year in history, leading to a 60/40 benchmark mix of 60% stocks and 40% bonds down by 16%. Personal finance expert Christine Benz has a way to build better and more resilient retirement portfolios that are less vulnerable to short-term market behavior. She will describe her bucket investing approach to building a retirement portfolio in a two-part series.
#retirementplanning #FinancialPlanning #InvestmentStrategies #PortfolioDiversification #RiskManagement
WEALTHTRACK Episode 1940 broadcast on March 31, 2023
00:00 Hello
00:41 Introduction
02:35 Interview with Christine Benz
21:50 One Investment
24:33 Action Point
More Info:
Bookshelf:
Morningstar’s 30-Minute Money Solutions: A Step-by-Step Guide to Managing Your Finances:
Morningstar Guide to Mutual Funds: Five-Star Strategies for Success: …(read more)
LEARN ABOUT: Investing During Inflation
REVEALED: Best Investment During Inflation
HOW TO INVEST IN GOLD: Gold IRA Investing
HOW TO INVEST IN SILVER: Silver IRA Investing
Risk management is a critical aspect of any investment strategy. Whether you are investing in stocks, bonds, real estate or any other asset, you need to have a plan in place to safeguard your investments from potential risks and uncertainties. With the right risk management techniques, you can better protect your investments and maximize your chances of success. In this article, we’ll look at some effective risk management techniques that can help you achieve your investment goals.
Diversification of portfolio
One of the most effective risk management techniques is diversification. By spreading your investment across different sectors, asset classes, and geographic regions, you can reduce the impact of any one particular investment on your portfolio. If one investment underperforms, for example, it may have a minimal effect on your overall portfolio if you have other successful investments. Diversification is a straightforward and effective way to minimize risk and is widely used by professional investors.
Asset allocation
Another important risk management technique is asset allocation. It refers to the process of dividing your investment portfolio into various asset classes, such as stocks, bonds, real estate, cash, and commodities, with the aim of achieving a balanced investment portfolio. You need to strike a balance between higher risk, higher reward asset classes, and lower risk, lower reward asset classes, based on your investment goals, risk tolerance and time horizon.
Value investing
Value investing is another popular risk management technique. It involves identifying undervalued assets, which are priced below their intrinsic value, and investing in them with the goal of realizing a significant return on investment once the assets are correctly priced. Value investing is a long-term strategy that is based on fundamental analysis and requires a lot of research and analysis. It is a low-risk strategy that has the potential to deliver significant returns.
Stop-loss orders
Stop-loss orders are a trading technique that is used to minimize losses. It allows you to set a predetermined price point, at which you will automatically sell an asset if it falls below a certain level. By doing so, you minimize your losses if the asset drops in value, and you limit your exposure to future losses.
Hedge funds
more advanced risk management technique is hedge funds. They use highly sophisticated strategies, such as arbitrage, leverage, and derivatives, to generate returns while minimizing risk. Hedge funds can be an excellent option for high net worth investors who want to diversify their portfolios and achieve higher returns while minimizing risk. However, hedge funds are only available to accredited investors, who meet strict financial requirements.
In conclusion, the above risk management techniques can help safeguard your investments and increase your chances of success. Diversification and asset allocation are two of the most essential strategies used by professional investors. If you are new to investing, it is recommended to start with these basic techniques to help you build a solid foundation for your investment journey. As you gain more experience and expertise, you can incorporate more advanced strategies such as value investing, stop-loss orders, and hedge funds into your investment plan. Remember, investing comes with inherent risks, but with the right risk management techniques, you can minimize these risks and maximize your chances of success.
Dividends are what got me into investing in the stock market. The thing to me is, if you invest and have other income outside of dividends then you will be able to live off dividends without selling. Which means you can pass that on to your kids which will give them a leg up in life. It's better to trade short term and make profit. Anna Olsen got me %100 as i have over $600K in my portfolio, I'm buying more now and I will buy more when it drops further.
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.
Gold and Silver …is a must
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.
I sold all my bond and went cash early last year and bought 5 percent CD end of last year. Loving it.
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".
luv luv luv Christine Benz
Wow interesting
Great content as always
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.
Always a great guest. This channel just keeps getting better and better.
When Christine talks, I feel like I am listening to a person genuinely concerned about my financial well-being. Great interview Consuelo.
Brilliant advise.
Boy was I glad to create that cash bucket a few years ago per Ms Benz’s suggestion.
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)