Many are declaring that 60/40 is a bad mix because bonds are riskier than they have ever been. But stocks are also extremely risky. Add likely inflation to the mix and it's big time scary. We'll discuss what do on 4/20/21 https://www.youtube.com/watch?v=PsKGK7IY9ls

1. 60/40
STOCKS/BONDS
IS WAY TOO RISKY
FOR BABY
BOOMERS
IRAs and Target Date Funds
are Poised to Blow Up

2. INDIVIDUAL RETIREMENT ACCOUNTS
The Model in the Middle
TARGET DATE FUNDS IN 401(K)S
The Oligopoly’s Choice
WHY 60/40?
60/40
90% Risky

3. WHY IS 60/40 TOO RISKY FOR BABY BOOMERS?
BABY BOOMERS ARE IN THE RISK ZONE

4. THE LESSON IN 2008
(1/08-2/09)
-50 -30 -10
Stocks lost 50%
60/40 lost 32%
Bonds lost 5%
Target Date Funds for People Retiring in 2010

5. Higher Risk Today Than 2008
Very expensive stocks and riskiest bonds ever

6. Expensive Stocks
Again
Riskiest Bonds Ever
Much Riskier Than 2008
2008

7. 110 Year History of 10-yr US Government
Bond Yields: 1912-2021
Source: Trading Economics
https://tradingeconomics.com/united-states/government-bond-yield
Lowest interest rates ever cannot be maintained

8. The Scariest Thing
Money Printing

9. A LIKELY SCENARIO
1. $13 Trillion in new money printing
creates inflation
2. Inflation forces increase in interest
rates – Fed can’t control
3. Increases in interest rates cause
decreases in stock & bond prices
4. Government prints more money to pay
increased interest on debt

10. RUN!!
Don’t Walk

11. REDUCING RISK

12. DESIGNING A TARGET DATE FUND
B = 55% Equity + 35% Risky Bonds
= 90% Risky
IRA

13. Perspectives
0
2
4
6
8
10
12
14
$Trillions of New Money Compared to Spending on Wars
New Money Costs of Wars
5.2 9.7 13 4.7 9.9 12
COVID
COVID
+
QE
COVID + QE + Infrastructure
WWII
WWII
+Since
2001
13 Biggest
Source: Glidepath Wealth Management and Congressional Research Service
Why Cash Might Not be Safe

14. Unconventional Thinking
Insurance:
Annuities & Guaranteed Withdrawals
Talmud

15. Diversified
Defense
Against
Inflation

16. Risk Mitigation
Structured
Products
Guaranteed Minimum
Withdrawal Benefits
(GMWB)
Tontines
Defined
Outcome
Pockets of
Money
TRIPs
Annuities

17. Summary
• Move to inflation protected safety: TIPS &
Real Assets & Cryptocurrencies
• Purchase assured income streams: Annuities
& Structured Products

18. By Ronald Surz

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