Glad you find the videos helpful :)

*takeaway, not getaway

brandonbeavisinvesting thank you! I also checked out your investment channel, great content!

Thank you!

But what if the logic tells me to listen to emotions? #imfucked

@Matthew Government bonds never pay higher than the inflation rate, not even when they had a yield of 10%. High-yield bonds, however, pay higher than the inflation rate; they also recover the fastest after a correction or bear market.

Bonds pay monthly, not just quarterly.

I think that makes a lot of sense. The 4% rule was based on 50% stocks and 50% bonds. A 100% stocks portfolio will outperform that, thus decreasing the relative risks over time.

The way I look at it is that older individuals have more "deadlines" for their investments; when they retire, they need to sell a portion of their investments to live off of. The issue with stocks is that if the deadline comes and the stock market is experiencing a downturn, the individual isn't able to "wait out" the negative performance and may actually put their income needs at risk if the downturn is bad enough. With bonds, it's pretty easy to match your income needs with different bond maturities; even if bond prices are down, you get your principal back at maturity so market fluctuations are less of a concern. At the end of the day, age is not the only factor when it comes to risk tolerance. I'm a young guy, but if I wanted to buy a house in two years, I wouldn't put the money in the stock market because I wouldn't want to risk losing money and not being able to afford the house (short-term, stocks could be up or down 50% if not more). Likewise, a wealthy 70-year old may have a portfolio full of stocks if they don't need the funds right away (i.e. they don't have any "deadlines"). But, holding all else constant, people tend to have a lower risk tolerance the older they get because they have deadlines that will force them to sell their holdings regardless of whether things are up or down. Hope this helps!

@@ThePlainBagel The only thing is, you're not selling all your stocks at once when the market is down. Let's say the stock market is relatively stable from age 65-70 and you're selling 1/30th of your portfolio each year for income. You're getting a high return on what's still in the market that whole time. Then the market takes a nose dive for like three or four, even five years straight (that would be unusual but let's think worst case scenario). You're selling each year at a loss, but then the market goes back to normal, maybe even flies high, then goes down, then up, and so on and so forth. At the end of the day, over a 30 year period you can expect things to more or less work out to an 8-10% return if you're invested in something like a dow or s&p500 index. No matter how reliable a bond is, the returns just can't compare to what you'd get from the stock market. And those returns should make up for the loses you'd endure selling during downturns more than what you'd make from moving your portfolio to bonds. Shouldn't it?

Darcy Fitzpatrick that’s true, but the markets have been down for 8-9 years before, and if you are selling a fixed amount (I.e. you need 50,000 each year) and markets are down, then the fixed payment could quickly reduce your savings, and I think most would use a fixed number over a percent. I’ll ask some colleagues and get their thoughts!

@@ThePlainBagel That would be great! Maybe it's the making of a future video. I feel like at the end of the day this is one of those emotional types of decisions people make based on a fear of the market doing something highly unusual. I'm willing to bet if you look at someone who retired in 1989 and sold off fixed amount of their portfolio each year for income while keeping the remainder in the market, they would have enjoyed a much higher income than the retiree who went the bond or GIC or the like route, and/or had a nice chunk leftover to pass on or donate or the like.

I completely agree with Darcy. Moving to bond as you approach retirement only makes sense if you're going convert to cash on the day you retire. But we live longer these days. You may need to support yourself for 25 or more years after you retire. The more sensible approach is to keep heavily invested in stocks, and only draw down a small portion at a time. Yes, the market has flat spots - even for years. But it still returns 10+% overall. Bonds return 3 or 4%. So you'd need way more money to fund your lifestyle via bonds. And if you have that much money, then you can afford a few flat spots in the market, since you're taking from your total wealth, not just the money you earned that year.

That's a great question! Truthfully, I don't have incredible insight here, but I've always tried to strike a balance between being too diversified and being too concentrated. I rarely enter a position simply because it offers diversification, but I will avoid adding to a sector I have too much exposure too. I suppose it comes down to mitigating both extremes...sorry if that's not as clear of an answer as you were looking for!

@@ThePlainBagel Thanks! That was the exact answer I was looking for and completely agree with your point of view :)

Boom: kzfaq.info/get/bejne/jLCXe85y1tXMkok.html

Glad someone noticed haha