American males in the most affluent counties across this country have a life expectancy of 80.5 years. Their female counterparts have a life expectancy of 84.9 years. Assuming a retirement or at least a slowing down sometime in our mid 60’s, this could mean a multi-decade period during which we are living off of our retirement savings.
Which means cash or short-term bonds will not be enough. Some risk assets will be necessary, in most cases. Some volatility will have to be tolerated, in some part of our portfolios. There is no alternative. Even for those of us who are living comfortably within our means and have responsibly saved money for decades. Risk-free rates of return – in real, inflation-adjusted terms – have been eliminated from the chess board. What other moves you got?
Fortunately, asset allocation strategies can be deliberately designed and managed for these situations.
Our most conservative strategy, Viking seeks to provide current income and preservation of capital. It is typically used to accomplish investor goals over shorter time horizons. In 1975, NASA sent its Viking orbiter and lander pair to Mars with the intention of studying the surface for 90 days. It outlasted the intended mission, sending information back to earth for years afterward. The Viking strategy consists of 75% fixed income and 25% global stocks, preferred stocks and real estate investment trusts.
Is Viking the right portfolio strategy for you? Ask a financial advisor today.