Ed_The_Gypsy
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
OK, I just found a post by Twaddle that may influence me to change my mind.
I followed a link to a Morningstar article, "You Don't Have to Retire from Aggressive Investing", by Peter Di Teressa, 09-16-02, who described a strategy devised by Frank Armstrong. I have high regard for Frank, so I accept it on face value.
I have to think about this more.
Cheers,
Ed
I followed a link to a Morningstar article, "You Don't Have to Retire from Aggressive Investing", by Peter Di Teressa, 09-16-02, who described a strategy devised by Frank Armstrong. I have high regard for Frank, so I accept it on face value.
He goes on to advise not to let growth be your only asset type.A Longer-Lasting PortfolioTo make your retirement portfolio last, follow this strategy devised by financial planner Frank Armstrong.
1. Divide your assets into three parts: cash, bonds, and stocks.
2. Keep one year's worth of living expenses in cash. That's the money you'll be living off of, so a money-market account will be fine. You want a year's worth of expenses because you don't want to dip into investments when they're down. You don't want to put much more in the cash pile, though--you could miss out on some of the gains you'd get from investing.
3. Put between five and seven years' worth of living expenses in a short-term bond fund. This is the key to the strategy: Seven years would have carried you through the longest stock-market declines in U.S. history. This should allow you to survive a down market without selling your stock funds.
[FONT="]4. The rest of your portfolio stays in stock funds. [/FONT]
I have to think about this more.
Cheers,
Ed