Money For the Rest of Us
Should You Be Invested 100% Stocks Before and During Retirement? A Recent Study Says Yes
Jan 3, 2024
The podcast discusses the pros and cons of investing retirement assets 100% in equity, including half in international stocks. It challenges the 4% spending rule and explores alternative strategies. The hosts emphasize the need for diversification and reliance on broader data. They compare various retirement investment strategies and highlight the risks of relying solely on US data. The importance of optimal spending rates, international diversification, and cautiousness with studies is also discussed.
25:29
AI Summary
AI Chapters
Episode notes
Podcast summary created with Snipd AI
Quick takeaways
- Investors should consider being 100% invested in stocks, including 50% domestic and 50% international stocks, as it can outperform age-based stock strategies and support retirement goals.
- Using a broader database that includes 38 developed market countries from 1890 to 2019, it has been found that a 100% stock portfolio with 50% domestic and 50% international stocks produces higher average retirement wealth and reduces the probability of retirement ruin compared to traditional strategies.
Deep dives
Challenging Life Cycle Investing Tenets
The podcast episode discusses a recent study that challenges two central tenets of life cycle investing. The authors argue that investors should be 100% invested in stocks rather than diversifying across stocks and bonds. Furthermore, they argue that this approach should be maintained even during retirement. The study finds that an even mix of 50% domestic stocks and 50% international stocks outperforms age-based stock strategies in building wealth, supporting retirement consumption, preserving capital, and generating bequest.
Remember Everything You Learn from Podcasts
Save insights instantly, chat with episodes, and build lasting knowledge - all powered by AI.
