Michael Pollack
speaker
119 appearances
2 recordings
1 series
first heard Apr 2022
last heard Jun 2023
Michael Pollack’s voice in public audio — every appearance, attributed to the second.
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Even increasing the portfolio allocation to equities by a small amount could make a big difference, could give you an extra one or two percentage points of growth over the next 20 years or so.
Well, rebalancing essentially means that at the get-go, you as the investor decides what portion of your portfolio is going to be in risk assets, in stocks notably.
Is it going to be 40%, 50%, 60%?
And then as the stock market moves up or down over time, the actual proportion of stocks that you hold in your portfolio can change.
And the idea of rebalancing is that you go back periodically, maybe twice or four times a year, and look at what's happened with the amount of stocks that you're holding and maybe tweak the holdings just to keep the amount of stocks that you're holding in line with your long-term goal.
In this particular environment, rebalancing is just as important as it is any other time.
And because the stock market is moving up and down a little bit more, the higher volatility, that might give you an opportunity to actually do some good rebalancing by selling off a little bit of your winners and adding other stocks that might have greater potential to recover.
Right.
Well, I mean, people always need to have a certain amount of cash around to meet their constant spending needs and their unanticipated spending needs.
The question is how much?
And it might be easier to try to figure that out if you do some planning.
If you work with a financial planner or an advisor, they basically model what's going to happen to your assets over a long period of time based on things like what the inflation rate could be,
what the market returns potentially could be.
Look at your longer term spending patterns.
Try to figure out what amount of cash makes sense to hold on to.
Try not to keep more cash than you really, really need because right now cash isn't paying very good returns.
It's a safe, stable area to keep your assets, but over a long period of time, you're going to lose a lot of spending power because of the inflation rate being as high as it is right now.
Banks are not paying very good rates on savings right now, but you can go to some of these websites, maxmyinterest.com, Bankrate, to find competitive rates.
Another possibility might be to buy an iSavings bond from the U.S.
Treasury.
Showing 81–100 of 119 · page 5 of 6
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