How to diversify your portfolio for retirement
Valuations, inflation and taxes are all simultaneously rising. These are wreaking havoc on retirement portfolios’ risk and therefore the stability of families’ ability to retire. Already, 2021 is a completely different playing field than 2020.
Domestic stocks —all of them — are close to all-time highs. Last year, the performers were the large cap tech stocks. So far this year, value and small cap stocks have taken the lead. What should an investor do in consideration of their retirement accounts?
On Friday, March 26, I joined Yahoo Finance Live to break down where investors should put their money and the best way to diversify your portfolio for retirement. My interview followed one with Kevin Hassett, former senior advisor to President Trump, in which Hassett discussed opening up participation in the thrift savings plan (matched by the federal government) to lower and middle income Americans. Doing so would help people in those income brackets save more money for retirement.
Click the image below to watch the full interview.
Key points discussed during the interview include:
International & Emerging Markets (EM). Emerging markets have been hit hard this year. What place do these-as well as all international stocks have in a retirement portfolio?
Rising Inflation and Bond Allocations. So far in 2021, bonds are being hit hard as interest rates rise. What place do bonds have in a retirement portfolio? Are there alternatives to traditional bonds that could be considered? What allocation to these asset classes is appropriate?
Taxes will increase — it’s just a matter of when and how much. How can investors prepare for these and lower their future tax bills through their retirement accounts?
What is one thing that investors can get better at? Most investors fail to review their 401(k) plans or their smaller outside retirement accounts regularly. Evaluate and re-balance these quarterly. Holistically review all your investments as a one portfolio — not a set of multiple accounts. The result: reduce risk and increase opportunities for upside.
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About Portia Capital Management
Michelle Connell, CFA is the President and Owner of Portia Capital Management, LLC, the only Registered Investment Advisory firm in DFW to be founded by a female CFA. Ms. Connell is one of the highest-rated finance professors in the United States, currently serving as an adjunct professor at The University of Texas in Dallas and teaching the CFA Review for the DFW CFA Society. Ms. Connell works with her students and private clients to understand the value of crafting a portfolio that includes conventional products as well as alternative assets, including private equity, private debt and real estate, and allows investment portfolio creation with greater downside protection and more consistent returns.