As you near (and enter) retirement you probably favor bonds, which provide income with less drama than stocks. However, less drama means less potential upside. With retirees living longer than ever before, it’s important to not go too conservative too early in life. And fortunately today, even 65 or 70 may be too early!
One suggested solution for our long life expectancy “problem” is to stay with stocks longer. But stocks can go down as well as up and a big pullback can inflict permanent damage on a portfolio.
So, we want to capture the dividends that stocks pay and the upside potential that they provide by minimizing our downside risk.… Read more