Investment Rule One—Avoid Ruin

How reducing exposure to a catastrophic event, such as running out of money during retirement, is a better strategy than trying to accurately predict a catastrophic event.

In this episode you’ll learn:

• How repeated exposures to low probability events can lead to ruin.
• How bonds have outperformed stocks over long stretches of time .
• How the success of retirement spending rules depend on the market environment and why a flexible approach to retirement spending makes the most sense given the wide variety of risk factors.

Thanks to WIX and Policy Genius for sponsoring the episode.

For show notes and more information on this episode click here.

• [0:20] Celebrating 250 episodes - thank you for listening!
• [1:51] 3 individuals who have greatly influenced David’s passion for good investing.
• [2:37] The sequence of life - and how you are affected by it - matters.
• [9:21] Defining risk and modifying exposure.
• [9:53] Case study: bonds vs. stocks.
• [15:34] The conditions for premium dividend yield.
• [18:00] Spending rules for retirement.
• [23:04] Considering worst-case scenarios.
• [26:10] Best strategies for retirement planning.

See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.