A cash allocation to supplement a "large" fixed income allocation when nearing retirement always makes a lot of sense. Betting on a near complete and permanent collapse of the US economy has always been a fool's game. Yes, there are a lot of "Zombie" companies out there right now (defined as not making sufficient cash returns to pay their coupons) that have inexplicably been allowed to refinance repeatedly for decades. It isn't the megacaps that are hocked over their ears (and they will gladly attend a fire sale when the debt bubble pops). If you are in a market cap weighted index, pick a fixed income and cash allocation that lets you sleep at night. Then go live your life.
Quote from: Financial.Velociraptor on April 27, 2022, 05:56:49 PMA cash allocation to supplement a "large" fixed income allocation when nearing retirement always makes a lot of sense. Betting on a near complete and permanent collapse of the US economy has always been a fool's game. Yes, there are a lot of "Zombie" companies out there right now (defined as not making sufficient cash returns to pay their coupons) that have inexplicably been allowed to refinance repeatedly for decades. It isn't the megacaps that are hocked over their ears (and they will gladly attend a fire sale when the debt bubble pops). If you are in a market cap weighted index, pick a fixed income and cash allocation that lets you sleep at night. Then go live your life. Ok thanks. I have a lump sum to invest (so much harder to deploy than DCAing over decades). I am looking at a Balanced portfolio 60 equities/40 cash - as I am 50. Does this sound right? I have no idea when to buy, very unnerving.
I agree that a case study would be helpful, but in a vacuum, 60/40 at age 50 seems reasonable. It's conservative for my taste, but I'm not you. I'm 45, near FI, and we're 80/20 (with that 20 split between bonds and cash).