Level II: Bulletproofing Your Retirement
There are two important facets of a strong portfolio: income, and opportunities. Miller’s Money Forever helps guide you through the better points of finance, and helps replace that income lost in our zero-interest-rate world.
Pre-crash, if an investor bought a CD at the prevailing rate, and then interest rates rose during that period, he would not lament his loss in net asset value. He would be satisfied with the interest, and when his CD matured, he would buy another one at the current rate. So why do we look at bond funds, see our net asset value go down, and worry? Because most bond funds are always busy selling, baking in those losses along the way.
Some funds, however, hold them to maturity. In that regard, it is like a CD. Of course, it is not FDIC insured. That does not make it unsafe, however. In fact, in the fall of 2008, I would have been better off holding non-callable bonds at a nice, juicy 6% rate instead of FDIC-insured CDs. My income certainly wouldn’t have taken the hit it did. (I must forgive myself for that sin against my portfolio, but now I know better.)
This is where the value of one of the best analyst teams in the world comes into focus. We focus on our subscribers’ income-investing needs, and I challenge our analysts to find safe, decent-yielding, fixed-income products that will not trade in tandem with the steroid-induced stock market—or alternatively, ones that will come back to life quickly if they do get knocked down with the market. They recently showed me seven different types of investments that met my criteria and still withstood our Five-Point Balancing Test.
Somewhere in the discussion, I mentioned how tired my peers are of having holes blown in their retirement plans. While nuclear-bomb-shelter safe may be impossible, we still want a bulletproof plan.
This is what we’ve done at Money Forever: built a bulletproof, income-generating portfolio that will stand up to almost anything the market can throw at it.
It is time to advance to Level II and learn about the vast market of income investments safe enough for even the most risk-wary retirees. Some investors may want to shoot for the moon, but we spent the bulk of our adult lives building our nest eggs; it’s time to let them work for us and enjoy retirement stress-free.