When in retirement you can have your own personal recession. How? Well look at the numbers.

• Inflations of 4%
• Fees of 2%
• Pension of 4%
• Market Drop of only 10%

Total drop in your nest egg value is 20%.

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So much for safe, steady as she goes, buy and hold long term investment of your nest egg. Do you know your retirement funds may be contributing to the Oil Price bubble? Your trusted wealth managers may be telling you to have a conservative balance portfolio in retirement whilst they speculate in oil with your money.

“A pension fund is supposed to be investing money in secure, stable investments for the benefit of the people whose money they are investing,” said Dan Lippe, an energy analyst at Houston-based Petral Consulting Inc. Retirement Funds Plowing Cash into Oil

I’m really not sure of the ethics of this. It is supposedly well intentioned and aimed at protecting your nest egg to some degree against inflation and the loss in value of the US dollar. However I am more of the view they were chasing their bonuses on what looks like a sure thing riding the oil trend, just like the housing bubble. They get their bonuses every quarter in real cash. They cannot be trusted.

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If you are a retiree and use Buy and Hold strategies with your nest egg you may be gambling. If you are relying on this money to live on then you need to manage the risk. I’m talking about Baby Boomers who don’t have much surplus money and will need the bulk of their money to be their nest egg and provide them with a pension.

When you were 20 or 30 years old you could take a stock market crash in your stride because time was on your side and you were contributing to your retirement fund to accumulate your nest egg.

Now both these things are gone. You might feel and believe that 60 is the new 40 but the reality is you are out of time and out of regular income to recover from a major financial loss. You need to face this and protect your nest egg.

There is no doubt in hindsight that Buy and Hold since

the 1980’s has provided good returns over the long term until now. So you may have accumulated a sizeable nest egg if you have been investing since that time. But it is not a given. It is not an unwritten law that this be so for ever and ever. It just happened then and it may happen again - but Baby Boomers should not rely on it.

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