The Oxford Club is a group of investment professionals, and they literally hold seminars across the country. During these seminars, there are many different questions that they have come to count on as simply part of the job. One of these would be the question of just how much retirement money someone should have in stocks. Their answer to this question is always somewhat surprising to everyone: in a nutshell, it’s not so much what you have in stocks, it’s how you strategize with the stocks in the different types of markets that makes a difference.
For example, in a bear market, the Oxford Club recommends that your focus not be on stocks but on low-risk bonds and cash that will fund your monthly income goals. It is because of this that the Oxford Club recommends setting aside a cash reserve of at least five years worth of income. The reason for this is simple: they realize there is such a thing as having too much money tied up in stocks.
Consider this: in a serious bear market, the value of stocks is going to decrease significantly. Many individuals who have too much money in stocks will lose a lot from their portfolio. However, those who have a reserve planned ahead for the bear market will be able to live off that and not have to liquidate any stocks.
Naturally, they are going to lose money from their cash reserve during this time while their stocks are taking a beating in the bear market. However, when the market finally rebounds and becomes a bull market once more, these wise investors will be able to sell at a high value and recoup the losses from their cash reserve under the bear market.
This type of “retirement rebalancing” is a tried-and-true method for retaining wealth even during the driest of times. It is in this manner that retirement income will continue to flourish. This is the type of education that the Oxford Club delivers to their members in a nutshell.
There is no question the Oxford Club has become well known for their strong, practice advise to their members. This is one of the main reasons why they continue to increase in popularity.
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