Asset Allocation Can't Save Us, But It's Still Crucial For Portfolio Results

James Picerno submits: SmartMoney asks: Is your index fund broken? Good question, although here’s a better one: Is your management of asset allocation broken?

James Picerno submits: SmartMoney asks: Is your index fund broken? Good question, although here’s a better one: Is your management of asset allocation broken?

The Great Recession came with a variety of silver linings, including a renewed commitment to save, reduce debt and focus on core values like relationships and experiences. Less noted has been a salutary effect on older workers and the employers that are aware enough to value them. Tough times generally have forced 60-plus workers to stay on the job longer in order to repair their ravaged savings. Many also have hung on to keep health insurance and bridge to the better Social Security benefits that come with reaching “normal” retirement age, which is slowly being pushed out into the future.

The Great Recession came with a variety of silver linings, including a renewed commitment to save, reduce debt and focus on core values like relationships and experiences. Less noted has been a salutary effect on older workers and the employers that are aware enough to value them. Tough times generally have forced 60-plus workers to stay on the job longer in order to repair their ravaged savings. Many also have hung on to keep health insurance and bridge to the better Social Security benefits that come with reaching “normal” retirement age, which is slowly being pushed out into the future.

Dirk Quayle submits:In a recent article I presented an asset allocation strategy, an ETF portfolio and potential managed payout scenarios for investors at or near retirement. Below I outline a strategy that investors may consider earlier in the retirement planning lifecycle.

MyPlanIQ submits:Building a steady and safe income producing portfolio is paramount to retirees. High yield stocks, preferred stocks, convertibles and bonds are the basic building blocks for such portfolios. Research results indicate that blue chip stocks with high dividends, unlike highly volatile and low dividend or no dividend stocks (such as many high tech stocks and small company stocks), have produced comparable or even slightly higher returns with less risk in long term.

George Spritzer submits: Many investors and their advisors spend a lot of their time on asset allocation.