Watching volatility in the stock market can lead many investors to second guess their investment plans. As I wrote to you here, risk tolerance is like a food allergy, you often discover after exposure.
So, what is counterbalancing in your portfolio? It’s owning assets that oftentimes will move in opposing directions in various markets. Below is a chart of the performance of government bonds vs. the S&P 500 in years when the performance of the S&P 500 was negative. Notice that in most (but not all) of those years, Treasury bonds had positive performance.
The yields on the Treasury yield curve below range from 3.92% for a 3-year maturity to 4.63% for a 20-year maturity.
Action Line: When you want to talk about counterbalancing and your retirement portfolio, email me at ejsmith@yoursurvivalguy.com. I’ll know you’re serious. In the meantime, click here to subscribe to my free monthly Survive & Thrive letter.
