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Old 05-26-2013, 12:38 PM   #21
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Originally Posted by audreyh1 View Post
Interesting article from Mike Kitces ....
Thanks for the link. I will now just cite this link in the future instead of writing "Buckets! Schmuckets!"

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Old 05-26-2013, 01:56 PM   #22
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Originally Posted by audreyh1 View Post
Interesting article from Mike Kitces about using traditional AA to maintain an appropriate risk profile as you age, but that you can still present it to clients from a "buckets" point of view when they get nervous about recent market volatility.

Should Financial Planners Invest Using Bucket Strategies Or Just Report That Way? - Kitces | Nerd's Eye View
Excellent article.

While the standard refrain for bucket strategies is that they're "a way to avoid selling stocks when they're down" the reality is that if the stock allocation in a portfolio declines in a market crash, the stocks wouldn't be sold anyway. The stocks would actually be underweighted at that point, the bonds would be overweighted, and the rebalancing portfolio would actually be selling bonds and buying stocks (along with liquidating bonds for any spending needs); that's just the way the rebalancing math works out, regardless of any bucketing!

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Old 05-26-2013, 02:11 PM   #23
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Here's another article by Kitces that you should read about bucket strategies
Are Retirement "Bucket" Strategies An Asset Allocation Mirage? - Kitces | Nerd's Eye View

Your allocation to equities & junk bonds is too high for my tastes/temperament. What is the historical SWR based on that AA?

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