Ideally, you want a blend of stocks and bonds that will
generate high enough returns so you can reach your financial goals but at the same time isn't so risky that you'll sell stocks in a panic during a major stock rout.
The idea is to invest enough in stocks to
generate high enough returns to build a decent retirement nest egg — but not so much that you end up selling stocks in a panic when the market takes one of its periodic dives.
Not exact matches
Even if you manage to keep up with inflation, you may be taking the risk that your money may not grow fast
enough without the
higher returns generated by stocks to meet your major financial goals in the years ahead.
As per research, most of the Debt Mutual Fund Managers of categories like Monthly Income Plan (MIP), Income Funds, Gilt Funds, Dynamic Bond Funds etc. who charge
high Expense Ratio are not able to
generate enough Alpha or extra
return by active management to compensate for the
higher expense ratio charged by the fund.
You use cards with
high enough credit limits to allow you the volume to
generate returns that make the hassle of doing this worthwhile.
With a large
enough traditional IRA, withdrawing it all at once can
generate a large tax bill, possibly pushing you into
higher tax brackets, resulting in quite a shock when you prepare your tax
return for that year.
Conservative investments with a
high exposure to bonds are also barely
generating enough return to cover 2 % + mutual fund fees.