Having read this, you mention having cash reserves to protect against a bear market. All of your funds are in ETFs. Are the way the ETFs are structured meant to remove the need for short term cash bucket? Thanks
The defensive/cash-like ETFs within the Retirement Portfolio are there to manage investment risk, but I wouldn’t regard them as a replacement for a personal short-term cash reserve.
For someone drawing an income from their portfolio, I still think keeping enough cash outside the system to cover near-term spending is sensible. That means you’re not forced to sell investments at an inconvenient point simply because you need the money.
So the system is designed to reduce sequence risk, but I wouldn’t rely on it to eliminate the need for a cash buffer altogether.
Having read this, you mention having cash reserves to protect against a bear market. All of your funds are in ETFs. Are the way the ETFs are structured meant to remove the need for short term cash bucket? Thanks
Good question. I’d separate the two things.
The defensive/cash-like ETFs within the Retirement Portfolio are there to manage investment risk, but I wouldn’t regard them as a replacement for a personal short-term cash reserve.
For someone drawing an income from their portfolio, I still think keeping enough cash outside the system to cover near-term spending is sensible. That means you’re not forced to sell investments at an inconvenient point simply because you need the money.
So the system is designed to reduce sequence risk, but I wouldn’t rely on it to eliminate the need for a cash buffer altogether.