Diversification is the proverbial don’t put all your eggs in one basket. So while diversification is about the eggs, asset allocation is about the basket.
Design your retirement portfolio to meet your goals consistent with how much risk you are comfortable taking. Recommend investments, based on an explicit balance of growth vs. security.
The U.S. stock market has come a long way from its Great Recession low. That low, at which the S&P 500 bottomed out at 666 on March 9, 2009, is what has been called “the Haines’ bottom,” named after legendary CNBC anchor Mark Haines.
Over the last ten years, however, $1 trillion of investors’ money has moved from active to indexes. A big reason for this is that, over that same period, most active managers have underperformed lower cost-index options.
You just retired. Along with a great career, you have built up a substantial 401(k) balance. However, now you need income, not growth.
So why should anyone own gold when its connection to money is founded in part on folklore and a gold standard that no longer exists? Well, first of all, economics and finance are not physics—a lot of it is ruled by mythology, rules of thumb, and superstitions.
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