I have for many years been an investor since age 18. I have found that stocks are best. Divesting in the sense of bonds, stocks, etc is the worse. Why do I say this? First off, there is ample proof stocks out perform all other investments. Second, what is the longest running down turn in the stock market? I have always been amazed at the way actuaries and planners tell people to switch to guarenteed investements as you approach retirement. I have never understood this.
Retirement planning at age 65 should not plan for 19 years in retirement. That is the average life expectancy at age 65 and is what acutaries use to deteremine risk. Some live longer (they loose) some die sooner (they win). Insurance companies bet you will live while you bet you will die. Annuity agents bet you will die while you bet you will live.
Based on a three year rough stock market, all one needs to ride through the rough area is to have income producing agents (dividends, cash) to last three years. This keeps you from selling capital. During the good times you replenish cash (Sell a little) from your ENGINE. During down turns you hold (preserve capital)COAST. If stocks were a good IDEA while you were saving for 40 years, they should be a good IDEA while you are in retirement for 25 years. If you switch to guarenteed or annuities, you will need a very large balance to stay up with not only standard of living, but inflation.
Look at those who live in comfort in retirement. What is the common denominator? Stocks. Few have bonds (Greenspan I hear owns no stocks and is 100% bonds). This could be why he speaks the way he does.
