The OP's father is 78. He could live another 20 years. In fact the average life expectancy for a 78 yo male is around 10 years. That is long term.You wrote “long-term” twice.Of course it is their money and they can do what every they want with it. They need to do what they are comfortable with. Someone might have $50M and get very distressed if the market went down 30%. But we all know that equities have significantly outperformed fixed income over the very long term. So, some people are worried about a temporary drop in the market...but I worry more about my long term returns being lower with too much FI. There are all kinds of risks. When you avoid one you take on another one.How can you be so sure that’s not an issue.+1To be honest... I think you want to be investing based on the beneficiaries at this point.
In my view fixed income is to weather equity downturns which isn't an issue here.
My dad is right about the same as what OP described when it comes to net worth and age. I can’t speak to temperament, but my dad has always been satisfied having a balanced portfolio- 50 years ago, and still today. There is NO WAY I would advise him to be so aggressively invested if he came to me and asked for help (he never has and likely never will).
Older folks with millions are quite possibly MORE bothered by a severe stock market unraveling since they know intuitively that they’re less likely to enjoy the full recovery when it eventually occurs. My dad told me once that the only time he ever deviated from his strategy what during the GFC when he stopped making new purchases for a brief period eight at the market lows. He like most everyone else was frightened by what was happening. Noe he’s much older and much wealthier.
It’s really easy to say an old person with a lot of money should swing for the fences, and put the wishes of heirs ahead of their own when you’re younger and can imagine how much that would benefit you or someone like you. But, it’s their money until it’s not and it’s their wishes and only theirs that should be considered.
That’s my exact point I was making- an old investor isn’t thinking “long-term”. It’s the heirs that are, and there in lies the problem. It’s a conflict that shouldn’t be taken lightly.
When I take my dad hiking I try to go at a pace that’s comfortable for him, and when it comes to investing I’d have the same approach if he were to ask me to join him.
How many of the last 10 years did FI even beat inflation?
Statistics: Posted by michaeljc70 — Tue Jul 16, 2024 6:45 am