I reallocated my investment portfolio, sold out of my 100% equity position and I’m not happy about it. Part two of a two-part series, you’ll learn why and how I’m making peace with it. Ensuring that your investment portfolio can fund your lifestyle for the duration of your lifespan is essential to success in FIRE. One of the most impactful elements of that is how your portfolio is constructed, or your asset allocation. In this episode, Eric discusses his desire to reduce the risk of his portfolio with Jason, and ensure he + Laura are set up for success. Topics discussed include the role of bonds + fixed income, the types of investment risk, seeking feedback from internet forums, and tax considerations. Join us for the second episode of this two-part series on Eric’s reallocation experience.
If you missed Part 1, which includes a link to a behind the scenes conversation with Eric + Laura, be sure to check it out first!
Note: This content does not constitute investment advice and is being presented for informational and educational purposes only.
Show Notes
Essential Background: If you haven’t watched our previous episodes on asset allocation (part 1 and part 2), this is highly relevant material to our discussion here.
Series I Savings Bonds (I Bonds): These assets are rightfully getting a lot of interest in the moment given their unusually high returns (for now). Get all the details via Treasury Direct. For more details, check out this recent Money Guy Show episode as well.
Investment Policy Statements (IPS) are key guiding documents for your investment portfolio. Don’t have one? Have a look at this Bogleheads wiki article for all the details that you’ll need to help put one in place.
How To Build A Retirement Paycheck: This is the first of three great Retirement Manifesto posts on author Fritz Gilbert’s implementation of the Bucket Strategy, which we have touched on in several episodes to date. Here you’ll find guidance on how to determine the asset allocation you’ll want to have in place by the time you retire early. The other two articles in the series are linked here as well.
A Bond Tent strategy is one of the common approaches used by the FIRE community to mitigate both Retirement Date + Sequence of Returns Risks (RD and SRR in the images below). As is often the case, Michael Kitces has a great article on the topic. We couldn’t cover sufficient depth on this important topic in our episode, but this post has all the details you need. See the graphics below:
You can find information on the tools we mention in each episode along with additional information in the Resources section of this site.
- Jason’s FI Blog
- Eric’s business: 30X40 Design Workshop
- Eric’s YouTube Channel
- Our podcast