SVOL - My 2024 Retirement Model Portfolio Yields 6% And Still Very Defensive

2024-01-24 23:00:20 ET

Summary

• Retirees should consider both income and capital preservation in their portfolios. My recommended portfolio is designed to minimize volatility and maximize total return.
• The recommended portfolio for retirees in 2024 includes a core "multi-asset fund," and six complementary holdings for diversification and boosting current income.
• The "core-satellite" approach allows for flexibility in entering and exiting positions without affecting the overall strategy.
• Key satellite positions in the portfolio include investment grade corporate bonds, alternative strategies, and diversified closed-end funds-of-funds.
• The portfolio is designed with a "set it and forget it" mentality, only meant to be rebalanced quarterly.

Introduction

A coworker of mine retiring this summer stopped me to ask if I had any thoughts on the market the other day. He knows I write for Seeking Alpha regularly, so this is fairly common. We spoke at length about his concerns, and I was very interested to hear that they were different from what I had expected.

His largest concern was not income, which is typically the major point of contention for retirees. Instead, he was worried that all the fantastic options yielding 5% right now like CDs and T-Bills would leave him with income but no growth.

Growth comes with a price—in the form of volatility. In his retirement, my coworker doesn't want to deal with substantial drops in his account, but still wants to participate in the market....

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