cargocar123
Confused about dryer sheets
- Joined
- Feb 21, 2023
- Messages
- 4
Had a financial advisor discuss this method (liability driven portfolio) and wondering if others have done this? Basically, it's continuing to buy bonds so you're covered 5 years out at all times, and put the rest in the market at a more aggressively.
1. Start by buying bonds (actual bonds, not a bond fund) to provide income for the next 5 years.
2. Every year, buy additional bonds to provide income for the 5th year out (so in year 2, you're buying bonds to cover year 6 so to speak). This "secures" your income and shields it from shorter term market fluctuations.
3. If the market drops significantly, hold off on buying bonds for a year or so. Generally the market corrects in 1-1.5 years. Once the market is back up, catch up on your bonds so you have 5 years out covered.
4. The rest of your monies are available to now invest more aggressively as your income is covered.
Thoughts? A good idea?
1. Start by buying bonds (actual bonds, not a bond fund) to provide income for the next 5 years.
2. Every year, buy additional bonds to provide income for the 5th year out (so in year 2, you're buying bonds to cover year 6 so to speak). This "secures" your income and shields it from shorter term market fluctuations.
3. If the market drops significantly, hold off on buying bonds for a year or so. Generally the market corrects in 1-1.5 years. Once the market is back up, catch up on your bonds so you have 5 years out covered.
4. The rest of your monies are available to now invest more aggressively as your income is covered.
Thoughts? A good idea?