We Put the Bucket System Through Additional Stress Tests
How would an even simpler retirement portfolio have fared during the bear market?
My recent stress test of a bucketed retirement portfolio yielded an encouraging result--and many terrific reader comments.
Although I introduced the portfolios in 2012, I assessed how they would have performed had they launched at the beginning of 2007, the year before the financial crisis began in earnest. The model portfolio, combined with the bucket system, acquitted itself well during this admittedly arbitrary time period. (You can read more about the bucket system here.) Assets in the portfolio were higher at the end of 2012 than they were at the outset, despite the fact that the portfolio had supplied living expenses for a hypothetical retired couple during that time and withstood the biggest market drop since the Great Depression.
Christine Benz does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.
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