There is no alternative for retirees with vast sums of money, other than to ensure capital preservation as main goal (one can still preserve capital and make returns, just don't get caught out cold on Buy and Hold with high equity exposure), managing returns second. Low or rather miniscule interest rates on deposits , like tax, should not be (even though it is happening) the main driver to increase exposure (and throwing caution to the wind) to equities (see my earlier post).
We know that Wall Street is one giant casino. You can stretch the rubber band to only a great degree, at some stage it will snap back.
Mainsteam press has it that we are much more capable to address a global crisis after GFC? Really? With a Fed chief that does not seem to know what he was doing and rather wet in the ears? With politicans the world over who cant even manage their domestic affairs , creating more risks to world trade? With debt that has ballooned substantially higher than what we had during GFC? With stock market valuation in US that is at or close to its zenith? I can go on and on, we should now not to listen to just mainstream news.
One thing is clear, the world is experiencing deflationary forces that is growing and getting worse and central bankers the world over cannot get inflation moving higher , corporate earnings are waning and the global stock markets are fuelled essentially by cheap money ; as long as we don't experience any shocks , investors are contend to move to and stay in equities and can enjoy decent returns but when the shocks morphs, the house-of-cards can be tested and investors who are oblivious to it all (under the Buy and Hold mantra) could lose it all and more...while we would never know when , stay vigilant and nimble is what we have to do to preserve capital.
