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No. of Recommendations: 1
I agree with the decision to close the FF retiree portfolios. I disagree with the conclusion there is a lack of interest in the concept of model retiree portfolios. For those of us who must manage finite assets to generate present and future income, this past year has been a great challenge, and a marvelous opportunity to explore and share optimal risk/reward portfolio structure methodologies appropriate for various age and income situations.
Personally,I couldn't work up much enthusiasm for the Foolish Four Portfolios because I did several versions of "Beat the Dow" years ago, and gradually worked out of it and into other stock selection procedures and portfolio allocations which seem to work better for me. What if Risky and Reluctant were age 50, and looking at retirement options. Risky could choose to take control of the investment of his vested company retirement entitlement, while Reluctant may decide to leave her money in the company pension fund and have a guaranteed pension at 65 based on an average earnings linked formula. Let's say both have 401k plans and possibly IRA's in addition to their employee pension plan entitlement. We could age Risky and Reluctant one year per month, and track their respective investment plans under real market conditions over the next fifteen months. Alternatively, we could assume Risky and Reluctant are already retired, with cash assets of, for example, $500,000 and $1,000,000 available for investment. Risky might choose a 100% stock portfolio to maximize capital appreciation. Reluctant might prefer to split her money between fixed income investments (high dividend stocks, bonds) and growth stocks. These are just rambling thoughts. My point is the idea of a model retiree portfolio is sound, and may just need some modification to capture reader following and active participation.
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