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

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Күн бұрын

100% Stock Portfolio--Is it ever a good idea?
With bond yields at historic lows, more investors seem to be moving to a 100% stock portfolio. In this video we'll examine an all stock investment strategy for both long-term investors AND those already in retirement.
Believe it or not, at least one study has concluded that a 100% stock portfolio IN RETIREMENT has the lowest failure rate and highest average balance 30 years after retirement.
Resources mentioned in video:
Vanguard returns by asset allocation: investor.vanguard.com/investi...
Retirement Glidepath: An International Perspective: blog.iese.edu/jestrada/files/...
Tools & Resources
📚 My Book (of course): amzn.to/2MsRJ9B
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4️⃣ Warren Buffett Portfolio: bit.ly/3pdI8mm
ABOUT ME
While still working as a trial attorney in the securities field, I started writing about personal finance and investing In 2007. In 2013 I started the Doughroller Money Podcast, which has been downloaded millions of times. Today I'm the Deputy Editor of Forbes Advisor, managing a growing team of editors and writers that produce content to help readers make the most of their money.
I'm also the author of Retire Before Mom and Dad--The Simple Numbers Behind a Lifetime of Financial Freedom (amzn.to/3by10EE)
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DISCLAIMER: I am not a financial adviser. These videos are for educational purposes only. Investing of any kind involves risk. Your investment and other financial decisions are solely your responsibility. It is imperative that you conduct your own research and seek professional advice as necessary. I am merely sharing my opinions.
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Пікірлер: 400

@stevenblackthorne4790 Жыл бұрын

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

@donh8833 2 жыл бұрын

My general rule of thumb is if you have 24x your annual income by the time you retire, you can go all stock indexes. (Provided you only pull replacement income)

@YTDataAnalyst 5 ай бұрын

Hi Hunan Train, your profit margin is quite inspiring and stunning for a starter; do you make use of spreadsheet, what is your top holding

@rajvo7406 4 ай бұрын

@hunantrain5683 crook

@glasshalffull2930 3 ай бұрын

*** SCAM ALERT ***

@donh8833 3 ай бұрын

@@glasshalffull2930 God I hate these stupid spam bots.

@glasshalffull2930 3 ай бұрын

@@donh8833 Me too! My fear is that they must snare a few people, otherwise why would they keep posting them.

@vinyl1Earthlink 3 жыл бұрын

As a retiree, I have all stocks. However, many of my stocks have very bond-like characteristics. If you can get good preferred stocks below par, and buy good REITs at a reasonable price, and get solid utilities at 15 times earnings, then you have a portfolio that will pay dividends pretty consistently. Yes, dividends can be cut, yes, REITs can get into trouble, but you have to do something with your money. During Covid, my stock portfolio briefly plunged 35%. The preferreds, most of the REITS, and the utilities all continued to pay dividends. Yes, my income went down slightly, but I used some of my cash to increase my holdings. A year or so later, I have more money than ever, and I'm continuing to buy more stock every month.

@JoshuaKevinPerry Жыл бұрын

talk to me about utilities you like

@vinyl1Earthlink Жыл бұрын

@@JoshuaKevinPerry - I don't like any utilities right now - they're all ridiculously overpriced at 25 times trailing earnings.

@Ladran_Sancho Жыл бұрын

Lost me at "pay dividends"

@translumination2002 Жыл бұрын

I think Rob did a video on why you should be dividends agnostic. They are paying an amount that should've gone into the stock price so I'm the long run it doesn't make any difference if you get dividends or sell your stock to get the money. You also get the capital gains discount if you sell your stock instead of paying your marginal tax rate on the dividends. I guess during a downturn you don't want to sell your stocks at deflated prices to fund your living expense so dividends will be better but I guess if you take a longer term perspective it may not & you should have some cash reserves for this situation anyway.

@vinyl1Earthlink Жыл бұрын

@@translumination2002 - Most dividends are taxed at the same rate as capital gains, 0% up to $42K and 15% up to $200K.

@mguti090 2 жыл бұрын

I'm 37 and I do 100% VTI just like JL Collins recommends.

@LegoStarWars217 3 жыл бұрын

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

@Acton65 3 жыл бұрын

Great overview Rob. Thank you. Appreciate your channel.

@kamumma1 3 жыл бұрын

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

@translumination2002 Жыл бұрын

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.

@glen7999 3 жыл бұрын

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.

@tekootianderson 3 жыл бұрын

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

@markmorris2517 3 жыл бұрын

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

@cernousekpetr 2 жыл бұрын

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

@frankofva8803 2 жыл бұрын

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

@mere_cat Жыл бұрын

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

@trevorpennington924 2 жыл бұрын

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

@bdwolf3638 3 жыл бұрын

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.

@kevinbarrett3706 3 жыл бұрын

Nice analysis; good job .

@mattcramer9187 3 жыл бұрын

Great video, thank you

@gauchogmail3866 11 ай бұрын

I am retired at 55. Investment 100% in sp500. My time horizon in at least 40-50 years till I die. With 40+ years time horizon, can’t afford to be conservative. Also when market crashes the loss is only the loss on the withdrawal not on the entire portfolio which can climb back.

@glasshalffull2930 3 ай бұрын

I too retired at 55 and just turned 64, but I had a $54K pension and work a few contracts a year for $9K-$12K annually. I was 100% in S&P500 since about 1990. At retirement, I had $1.2 million and the spouse was still working. I also had $30K or so in the bank. The way I figured it is the max contribution I could make was $15K back then and this was only 1.5% of my portfolio. So, the idea of the 1.5% annual contribution being able to be the driving force to recoup from a major down turn is ridiculous. (It would certainly of helped some, but the recovery is the big upward recovery swing of the market In general). With my wife working and savings I thought I could withstand a few year downturn. This is why I decided to stay in 100% S&P 500. Now nine years later it has grown to $3.3 million and that is with drawing $54K a year for the past four years. The Covid correction hurt, but it has recovered.

@dmitry7908 25 күн бұрын

What funds do you live your daily life on? You don't reinvest dividends? You're obviously at least 7 years too young for SS.

@psoidonym2389 Жыл бұрын

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.

@JayCalderon211 Жыл бұрын

Thank you, Rob

@forestmotoadventures 3 жыл бұрын

I think I could stomach 100% stock retirement portfolio as long as I have 2 years of expenses in cash.

@stevesedio1656 3 жыл бұрын

Exactly. Today, bonds, and interest rates don't even keep up with inflation. Real estate? Not today (maybe the next crash). Draw 4% of the current portfolio value, not 4% of the initial + inflation. If the stock market drops 50%, augment with cash. Most of us soon to, or recent, retires have a 20+ year time line. If the situation changes, we can change allocation.

@baybay7898 2 жыл бұрын

I guess you have enough stable incomes-like SS, annuity to cover your basic exp.

@barberian2525 2 жыл бұрын

But then thats not 100 percent stock portfolio cuz you have cash on hand at least 100k. So you could tech not stomach 100%

@forestmotoadventures 2 жыл бұрын

@@barberian2525 Great critical thinking David. You would be right if I was including “cash” as part of my investment portfolio. This two years of expenses is completely outside of any investment portfolio. Cheers and thanks for thinking critically.

@kevinhaskins6619 2 жыл бұрын

The thing is... how you think changes with age. It is a biological certainty that our thinking changes and not just due to changing market conditions nor how we currently feel about risk. If you don't account for your aging brain you are leaving out the most important aspect of financial planning. Your own behavior.

@lifeisgood070 2 жыл бұрын

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

@robertmccullagh6251 3 жыл бұрын

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

@mikeabuckner 3 жыл бұрын

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 2 жыл бұрын

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.

@paulthorpe766 2 жыл бұрын

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 !

@whatisheartscont2be645 Жыл бұрын

Very insightful.

@Riggsnic_co 11 ай бұрын

Great video, a number of the most eminent market experts have been expressing their views on the severity of the impending economic downturn and the extent to which equities might plummet. This is because the economy is heading towards a recession and inflation is persistently above the Federal Reserve's 2% target. As I'm aiming to create a portfolio worth no less than $850,000 before I turn 60, I would appreciate any advice on potential investments.

@bob.weaver72 11 ай бұрын

There are many other interesting stocks in many industries that you might follow. You don't have to act on every forecast, so I'll suggest that you work with a financial advisor who can help you choose the best times to purchase and sell the shares or ETFs you want to acquire.

@martingiavarini 11 ай бұрын

I've been in touch with a financial advisor ever since I started my business. Knowing today's culture The challenge is knowing when to purchase or sell when investing in trending stocks, which is pretty simple. On my portfolio, which has grown over $900k in a little over a year, my adviser chooses entry and exit orders.

@hermanramos7092 11 ай бұрын

@@martingiavarini Could you possibly recommend a trustworthy advisor you've consulted with?

@martingiavarini 11 ай бұрын

renowned for her proficiency and expertise in the financial market, “Catherine Morrison Evans” my financial advisor, holds a broad understanding of portfolio diversification and is recognized as an authority in this domain.

@hermanramos7092 11 ай бұрын

Thank you so much for your helpful tip! I was able to verify the person and book a call session with her. She seems very proficient and I'm really grateful for your guidance

@MerryHampton 3 жыл бұрын

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

@tamib64 Ай бұрын

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.

@jesuslives316 2 жыл бұрын

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

@auricgoldfinger8478 2 жыл бұрын

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

@markmccarren827 3 жыл бұрын

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 3 жыл бұрын

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.

@Gary-ib8dz 2 ай бұрын

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.

@BryanColliver 3 жыл бұрын

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.

@lw9936 3 жыл бұрын

@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!

@davidrogers0717 2 жыл бұрын

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?

@larryb131 2 жыл бұрын

Iam looking forward to your analysis on this topic with bond yields being essentially 0 right now.

@gilbrook 3 жыл бұрын

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

@angelarizaga4830 3 жыл бұрын

Great video! Btw, can I ask what is your current allocation? Thanks

@PM-oe5mk 3 жыл бұрын

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 3 жыл бұрын

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 2 жыл бұрын

Young people are asking "What is a pension?"

@jmc8076 Жыл бұрын

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

@VomBethel 3 жыл бұрын

The timing of this video couldn't be better! I'm meeting early next week with my banker to discuss reallocating some of the retirement investments considering my overall investment/cash assets are too heavily weighted in cash/bonds. I was considering going "all-in" with stocks on the retirement accounts to offset some of the other accounts that are heavily weighted in cash/bonds. I think I'll consider 90% stocks (diversified) and 10% bonds now. We have about 10 years until we plan to start withdrawing from the retirement accounts.

@brianmason5500 3 жыл бұрын

Cash, bonds and mutual funds are a banker's dream but may not be best for you. Might I suggest that you see an independent, fee for service, financial planner who does not benefit from what you buy and hold.

@swright5690 9 ай бұрын

But if you stayed safe in 2022 and 2023 you would feel like a genius. What did you do?

@glasshalffull2930 3 ай бұрын

@@swright5690 Genius in 2022, but in 2023 the S&P500 was up over 24% and it’s up about 9% so far in 2024.

@vanguardvaluist2614 3 жыл бұрын

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.

@nicholasmartinez6043 2 жыл бұрын

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.

@quantumperplexity 8 ай бұрын

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.

@johnbrown1851 2 жыл бұрын

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.

@darrelvaldez9455 3 жыл бұрын

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"

@joshford7828 2 жыл бұрын

I think 100% stocks is doable, my preference being in mutual funds or etfs to diversify. Be completely debt free, house, everything. And have a couple years of cash on hand. That way you can survive a couple years of a total market downturn with out touching your nest egg. The best part of a major market drop is buying up your favorite stocks at a discount while your working .

@davidbrooks8809 2 жыл бұрын

You're me..I'm 51..debt free... but 80/20.. single..l may try 💯.. maybe 🤔..lol

@ManjitSandhu 10 күн бұрын

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??

@Larrythe65 3 жыл бұрын

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

@dr.g3860 3 жыл бұрын

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

@DicksonMaimouth 3 жыл бұрын

@@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 2 жыл бұрын

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

@larryjones9773 2 жыл бұрын

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

@gorambo 2 жыл бұрын

@@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.

@brianh6680 Ай бұрын

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.

@allenlane5000 10 ай бұрын

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.

@limobob100 3 жыл бұрын

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

@john00123 3 жыл бұрын

Great video twin

@tommorgan4735 3 жыл бұрын

haha

@lw9936 3 жыл бұрын

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

@thetruedealio8792 2 жыл бұрын

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 25 күн бұрын

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

@thetruedealio8792 25 күн бұрын

@@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%.

@davidrounds3245 2 жыл бұрын

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 2 жыл бұрын

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 2 жыл бұрын

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

@rightshotphotography2576 3 жыл бұрын

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 Жыл бұрын

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

@jmc8076 Жыл бұрын

@@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.

@CaptainBenjamins 4 ай бұрын

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

@johnlittle8267 2 жыл бұрын

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.

@adamstaley5093 3 жыл бұрын

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.

@luisoncpp 2 жыл бұрын

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.

@alex182618 2 жыл бұрын

Overall a great video. 6:27 People do not invest lump sum and just leave it there for 10+ years. They invest every month. Also talking about specific funds is much nicer than talking about general markets.

@Gary-ib8dz 2 ай бұрын

Regarding the specific funds.....do you want him to over the same info with a dozen funds? How would he pick which ones?

@johnford5568 2 жыл бұрын

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 8 ай бұрын

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

@johnford5568 8 ай бұрын

@@CaptainBenjamins I was about 45, 60 now

@meibing4912 2 жыл бұрын

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.

@doug6839 3 ай бұрын

There is no 20 year rolling period where bonds outperform stocks since the stock market opened. If you are young, 100% stock is probably the best move.

@travisharrisphotography Жыл бұрын

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 3 ай бұрын

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.

@adrianb6073 2 ай бұрын

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.

@joekuhnlovesretirement 3 жыл бұрын

Excellent video!!!! As others have stated, current bond yields make back testing a trap. I’m retired, I use a 3 bucket strategy to manage the market dynamics. Bucket 1 is 4-5 years and essentially cash. Bucket 2 is 60/40: bucket 3 is 95/5. This allows sleep at night without stress. I did see your other video on bucket strategy- also great. In the end, it’s all risk. What can you stand?

@cedrictchakoudie1327 3 жыл бұрын

Nothing.

@ZCAR355 2 жыл бұрын

Love your channel, Joe!

@brianmason5500 3 жыл бұрын

At 67 years old I do not understand the fixation on bonds. I remember when I used to get 4% on a savings account. Those days are gone and so are 5% AAA bonds. Instead the way to go is with dividend kings, income and growth to cover inflation. I won't invest if it doesn't pay at least 4% and has growth record to boot. The only reason I see to hold 20% bonds is to buy more dividend stocks when prices are down

@DavidEVogel 3 жыл бұрын

At 67 years old I do not understand the fixation on bonds. Bonds are good for cash flow during a bear market. During a bull market you can take 5% of your portfolio for spending and never touch the principle. During a bear market the 5% hurts bad. No only is your principle falling but you are pulling an additional 5%. If you are comfortable with 100% equities fine with me.

@Jack51971 3 ай бұрын

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

@yourportlandlifestyle2907 Жыл бұрын

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

@rpguitar 3 жыл бұрын

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 3 жыл бұрын

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

@rpguitar 3 жыл бұрын

@@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!)

@Sar0 Жыл бұрын

I'll be a 100% up to 55 years of age and be 80/20 by the age of 65 on my regular. My IRA will be 60/20/20 by the age of 55. 50/50 or 60/40. I think are for funds with over 1.5 million

@ph5915 3 жыл бұрын

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 3 жыл бұрын

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

@ph5915 3 жыл бұрын

@@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%...

@panyc10 3 жыл бұрын

Surely a 100% equity portfolio is going to move a lot, however international diversification helps reducing volatility (a bit). More importantly, these studies were made with bonds actually yielding something. These days I am not sure at all these ideas are applicable and probably we just have to live with the fact that things are going to be more volatile. Also worth noting that while market crashes still happen, global markets did a lot better in terms of risk/profitability in a low yield environment, hence it may not be a problem after all!

@eos6984 8 ай бұрын

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.

@ld4974 2 жыл бұрын

These are the types of questions that only pop up at the top of a 12 year bull market.

@sbkpilot1 3 жыл бұрын

there is a caveat to this though, in 1999 the 10 year Treasury was at 6% and by 2014 it had dropped to less than 3%... the outperformance in Bonds came due to this massive lowering of rates. Given that the 10 year is currently at 1.3% the 99-14 scenario can never happen again in terms of Bond performance which is why the historical backtest isn't particularly accurate. Put another way, the 7 year Treasury (Intermediate term) is at 1% right now, even if it went to zero which is highly unlikely, the maximum capital gain you're going to get is 1% x 7 = 7% total which isn't much. The more likely scenario is that Bonds are either going to be flat or lose money in the next decade. I do agree though there are other reasons to hold Bonds, to manage volatility and also Sequence or Returns Risk...

@rob_berger 3 жыл бұрын

Good analysis. I think the key is not so much that 99 to 14 will repeat itself, but that a 100% stock portfolio can underperform 90/10 or 80/10 for a decade or more.

@matthewharrigan3568 3 жыл бұрын

Your math on bond capital gains isn't quite right. Look up bond convexity. Basically the true relationship is nonlinear, and that effect is very strong as yield decreases.

@cmdrfunk 3 ай бұрын

Hello from the future where the 10 year Treasury is 4.52% and can NEVER DROP AGAIN!

@edwardbrito3332 3 жыл бұрын

Yes especially 12 years into a bull market because this time it’s different if older in doubt unfortunately you find out.

@samryan7954 Жыл бұрын

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

@gcburkett 3 жыл бұрын

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 3 жыл бұрын

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

@jmc8076 Жыл бұрын

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

@peterfischer7084 2 жыл бұрын

What about mezzanine investments like e.g. fixed-to-floating preferreds as a compromise?

@franksatterfield9764 3 жыл бұрын

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

@GodfatherInOhio 29 күн бұрын

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)

@thomaslee7189 3 жыл бұрын

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

@darrelvaldez9455 3 жыл бұрын

correct

@lisadowling6047 2 жыл бұрын

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 2 жыл бұрын

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

@johnbrown1851 2 жыл бұрын

@@DavidEVogel git er done 😎

@David-fv7zg 2 жыл бұрын

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 2 жыл бұрын

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.

@mattehlen1079 2 жыл бұрын

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 2 ай бұрын

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.

@8G00SE8 2 жыл бұрын

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.

@RobotMowerTricks 2 жыл бұрын

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 3 ай бұрын

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!

@219garry 2 жыл бұрын

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 2 жыл бұрын

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

@jmc8076 Жыл бұрын

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.

@brentinjapan 2 жыл бұрын

Thanks for all your videos! In this and other videos the word "stock" is pretty loaded. Like, which stocks? Rhetorical question. In any case, it seems to me that in retirement you have more time, knowledge, and experience, so should a desire be there it's the best time to invest in stocks. Also, you seem reticent to believe what the data is showing you. I mean you conclude with the datum "100% stocks are better", then contort your face and make some possible reasons why it's not actually the case. LOL

@Gary-ib8dz 2 ай бұрын

Which stocks?....all of them. Total market index. I don't think it's that Rob doesn't believe the data. I think it is that Rob does not want to ride the roller coaster of 100% stocks in retirement. I think he'd sleep better with the 2nd place plan of 60/40.

@newviewnc 9 ай бұрын

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

@14goldenjay 3 ай бұрын

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

@Magdalene777 6 ай бұрын

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

@seattledan Жыл бұрын

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.

@Sean-jb5gi 2 жыл бұрын

Does your analysis account for the dividends?

@pawnmove 2 жыл бұрын

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?

@davestevis200 3 жыл бұрын

Hi Rob, thank you for the informative video. I must admit, I don't understand bonds at all. I currently have 100% of my IRA's (roth-65%/trad-35%) in the C.S. total stock market index fund (.03 expense ratio) and am 12 years until 59.5 y.o. at which point I may start to draw from it. I have seriously been considering moving at least 10% into short term bonds (an index fund?) as Warren Buffet suggests. I see you used Intermediate term for your example here for 10 and 20%. Is there some proven strategy if you increase from 10% in bonds to say 30%, such as -10% short/10% int./10% long term? If 80 would I mix short and intermediate only? I would truly appreciate if you can help me understand this as well as where I should be purchasing these assets - are Index funds at my C.S. brokerage the best source to get this exposure?

@geoffgordon9569 2 жыл бұрын

I'm using Fidelity Bond Index for 20% of my portfolio. The fund is labeled intermediate term.

@jmc8076 Жыл бұрын

Longer term bond funds best for higher rates/inflation. Buffet’s advised fund for heirs/wife: 90% VOO + 10% VGSH. At the time he chose that fund rates/inflation were lower. But billionaires give the masses part of the truth not all. Why would he tell strangers exact contents of a private will? I wouldn’t. Cheers

@ljzmudzinski2807 2 жыл бұрын

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?