Rethinking Your Retirement Portfolio Mix
According to U.S. News, here are some things to keep in mind while altering the portfolio mix:
Save more and increase equity holdings: Increasing your savings rate while reducing spending can help you in retirement. You might need to tweak your asset allocation more toward the equity side. Self-directed investors can use a mix of equities and corporate bonds to boost yields, he says, but he advises them to stay away from some of the new investing strategies such as liquid alternatives that issuers say replicate the alternative strategies popular with institutional clients like hedge funds.
Role of Bonds: Bonds still have a part in retiree portfolios, although it's not in their traditional role as income providers. Experts say bonds still have a part in retiree portfolios, although it's not in their traditional role as income providers. Rather, they can act as a ballast in market downturns, and Schwartz notes that, with a few exceptions, bond portfolios were flat to slightly higher when the stock market fell more than 30% in the first quarter.
The Bucket and Barbell Approaches: Bucket approach entails dedicating your money into thirds: among short-term, medium-term, and long-term investments. The barbell approach is increasing the amount of cash and other liquid investments to cover and then devoting the rest of the portfolio to holdings.
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