Investment Question?? Zvi Bodie's ". Risk Less and Prosper"

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mholdi1540
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Investment Question?? Zvi Bodie's ". Risk Less and Prosper"

Post by mholdi1540 » Tue Mar 20, 2012 1:03 pm

Has anyone out the read Professor Bodie's recent book "...Risk Less & Prosper" and does anyone really have 100% of their retirement plan in TIPS and the rest in I-Bonds?? Tell me what you think of his investing philosophy and would you follow it in light of the recent financial disaster we just came through in 2007 - 2008 ??? Thanks in advance. The Financial Novice>>

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bobcat2
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Re: Investment Question?? Zvi Bodie's ". Risk Less and Pros

Post by bobcat2 » Tue Mar 20, 2012 1:26 pm

mholdi1540 wrote:Has anyone out the read Professor Bodie's recent book "...Risk Less & Prosper" and does anyone really have 100% of their retirement plan in TIPS and the rest in I-Bonds?? Tell me what you think of his investing philosophy and would you follow it in light of the recent financial disaster we just came through in 2007 - 2008 ??? Thanks in advance. The Financial Novice>>

I have read the book. The book does not advocate that investors should have 100% of their retirement plan in TIPS and I-bonds. The book does advocate that retirement investors should have two retirement income goals. The higher retirement income goal is the amount of real income you want to have in retirement, i.e. your aspirational retirement income goal. The lower retirement income goal is a safe floor level of retirement income that you definitely don't want to fall below. That lower floor level of income consists of SS benefits, DB pension benefits, life annuity income, and income from TIPS and I-bonds. How risky you fund the retirement income gap between the floor level of retirement income and the aspirational level of retirement income is up to you.

BobK
In finance risk is defined as uncertainty that is consequential (nontrivial). | The two main methods of dealing with financial risk are the matching of assets to goals & diversifying.

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bob90245
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Re: Investment Question?? Zvi Bodie's ". Risk Less and Pros

Post by bob90245 » Tue Mar 20, 2012 1:31 pm

I read the book. But in follow up articles, he departs from his advice in his book. Bodie now has said that if you are an investor in your 20's and 30's, you don't need to put 100% of your nest egg devoted to base retirement needs into TIPS and IBonds.
Ignore the market noise. Keep to your rebalancing schedule whether that is semi-annual, annual or trigger bands.

dbr
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Re: Investment Question?? Zvi Bodie's ". Risk Less and Pros

Post by dbr » Tue Mar 20, 2012 1:36 pm

bob90245 wrote:I read the book. But in follow up articles, he departs from his advice in his book. Bodie now has said that if you are an investor in your 20's and 30's, you don't need to put 100% of your nest egg devoted to base retirement needs into TIPS and IBonds.


And in retirement the consideration mentioned above to annuitized income streams is at least as important as any TIPS/I-bonds concept. My take is that Bodie is a smart and concerned investment advisor and retirement planner who is not flippantly advocating any such thing as "put everything in TIPS."

beardsworth
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Re: Investment Question?? Zvi Bodie's ". Risk Less and Pros

Post by beardsworth » Tue Mar 20, 2012 1:57 pm

mholdi1540 wrote:Has anyone out the read Professor Bodie's recent book "...Risk Less & Prosper" and does anyone really have 100% of their retirement plan in TIPS and the rest in I-Bonds?? Tell me what you think of his investing philosophy and would you follow it in light of the recent financial disaster we just came through in 2007 - 2008 ??? Thanks in advance. The Financial Novice>>


Hi mholdi1540,

Although your user profile shows that you signed up here at Bogleheads over six months ago, your low post count indicates that you haven't been a regular poster here. So, welcome back.

It's generally a good idea to first try the search feature at the top of the forum home page before starting a new thread. Searching for "Bodie risk less" would, for example, lead you to the following extensive threads which have already appeared on this subject and incorporate many participants' differing thoughts:

viewtopic.php?f=10&t=91667

viewtopic.php?t=87875

viewtopic.php?f=10&t=92564

Best wishes.

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