Finsum

Finsum

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As traditional 60/40 portfolios face challenges from high interest rates, large deficits, and geopolitical uncertainty, BlackRock suggests evolving asset allocations by incorporating alternatives like liquid alts, gold, and bitcoin. Their Target Allocation model portfolios follow a structured process—sourcing, screening, and sizing—to thoughtfully reconfigure bond-heavy portfolios for modern conditions. 

 

This involves reducing standard bond exposure in favor of bond-like alternative strategies such as market neutral or merger arbitrage, while preserving resilience in recessionary scenarios. 

 

Screening over 500 liquid alt funds, BlackRock emphasizes operational quality, performance consistency, and true diversification potential before inclusion. Ultimately, portfolio sizing is optimized to align with investor risk profiles, often making alternatives a significant component—up to half of the fixed income portion in balanced portfolios—while adjusting for more conservative or aggressive strategies.


Gold and bitcoin, though more volatile, should be considered for diversification, with gold typically replacing bonds and bitcoin funded from equities.

Monday, 05 May 2025 05:05

Three Fixed Annuities for this Month

Annuities offer retirees a steady income stream, with fixed annuities providing guaranteed interest rates during the accumulation phase and predictable payouts in retirement. 

 

April 2025’s top fixed annuities include: Gainbridge’s SteadyPace at 5.80% over five years, Reliance Standard’s 5.00% option, and higher-premium offerings like MassMutual’s Premier Voyage 5, which reaches up to 4.90% for $1M+ investments. 

 

Rates generally vary by premium size and contract length, with most products requiring $10,000–$100,000 minimums and terms of three to five years. Fixed annuities also offer tax-deferred growth and can be customized with features like survivor or death benefits. However, higher returns often require larger upfront investments, and early withdrawals can trigger penalties. 


Despite their complexity, fixed annuities remain a useful tool for generating reliable retirement income, particularly for those seeking stability, tax deferral, and no contribution limits.

Wednesday, 30 April 2025 10:23

The Ins and Outs of Target Date Funds

Target-date funds are designed for investors with a specific retirement date in mind, automatically adjusting their investment mix to become more conservative as that date approaches. 

 

These funds typically hold a variety of mutual funds rather than individual stocks or bonds, making them a diversified “fund of funds” that simplifies asset allocation. Early in an investor’s career, target-date funds emphasize growth by leaning heavily on equities, then gradually shift toward bonds to preserve capital as retirement nears. 

 

Each fund follows a predetermined glide path, which guides the transition from aggressive to conservative investments over time. Investors benefit from a hands-off approach, as the fund handles rebalancing and risk adjustments without the need for active management. 


Finsum: Overall, target-date funds offer a convenient, age-based solution that combines diversification, risk control, and simplicity in a single investment vehicle.

Bitcoin climbed over 2% on Friday to $83,959, outperforming equities after China announced retaliatory tariffs against U.S. goods. While most major cryptocurrencies like Solana and Dogecoin also gained around 6%, crypto-related stocks such as Coinbase fell, though MicroStrategy rose nearly 4%. 

 

Analysts suggest the decentralized nature of crypto may insulate it from geopolitical shocks, potentially attracting capital away from traditional markets. 

 

Investors reacted sharply to escalating trade tensions, with China’s 34% levy mirroring Trump’s earlier tariff hike, further pressuring U.S. markets. Despite recent volatility, bitcoin has held steady in the $80,000–$90,000 range, showing resilience compared to stocks. 


Finsum: As global trade realigns and dollar reliance weakens, bitcoin is increasingly seen as both a liquidity source and a hedge against uncertainty.

In a high-inflation environment, variable annuities offer a unique blend of investment growth and guaranteed income, making them an attractive option for certain retirees. Unlike fixed annuities, their value rises and falls with market performance, allowing for inflation-beating potential over time. 

 

They also provide tax-deferred growth and the option to convert savings into a predictable income stream that can last for life. Optional riders can offer added benefits like long-term care coverage or income guarantees, though these come with additional fees. 

 

However, high costs, market risk, and limited liquidity make them unsuitable for all investors. 


Finsum: For those who’ve maxed out other retirement vehicles and can tolerate some risk, variable annuities may help protect purchasing power while delivering steady income.

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