One of the questions that many people entering retirement have is just how much of their portfolio should be in stocks. The answer to that question depends on a number of factors such as age, health, how much you have stashed away, and what your monthly expenses are. The Chief Investment Strategist for The Oxford Club, Alexander Green, said that he calls retirement rebalancing.
Many people are going to spend 20, 30, or even more years in retirement. Due to this people need to continue having a sizable portion of their portfolio in stocks because over the long term that has historically provided the largest returns. However, those in retirement don’t want to have too much of their portfolio invested in stocks as a bear market can be devastating at that age when you’re drawing income from your portfolio rather than putting more money into it.
With retirement rebalancing you will put enough of your portfolio in bonds and cash in order to cover the costs of your essentials. Have at least five years worth of your expenses in bonds and cash. If a bear market does occur you can use your bonds and cash until it recovers, at which point you can take money out of your stocks and replenish the cash and bonds.
The Oxford Club was established in 1999 and was one of the very first independent financial education websites. They offer their advice through a variety of media including videos, conferences, courses, and a daily free e-letter. One of the core concepts of this organization is “liberty through wealth” as they seek to help others gain financial freedom.
Today, The Oxford Club is 80,000 members strong. They conduct independent research into a large variety of investment opportunities. When they find one that meets the criteria of being both highly profitable as well as low risk they then share it wither their members. Their members are found throughout the world in over 100 different nations. They also facilitate communication among their members through different ways including regional seminars, online message boards, and speaking tours.