Why My 76-Year-Old Father Remains Fully Invested in Stocks

I'm Tyler, a former financial advisor and portfolio manager, and now I create financial content for free so that you don't have to pay for it. Today, I want to share why my father, at the age of 76, is still 100% invested in stocks.

1. Expected Growth of Stocks

Firstly, he understands that stocks are expected to grow at an average rate of 8% per year.

2. Dividend Returns

Secondly, by investing in dividend stocks, he can achieve around 3.5% returns from dividends alone each year. This means he can responsibly sell off 4% of his stocks to support his lifestyle while knowing his portfolio can still grow at 4% per year.

3. Future Portfolio Value

Moreover, he knows that his portfolio will likely be worth three times the initial investment in just 15 years. The dividends will comfortably cover his expenses, while his money grows indefinitely at that 8% annual rate.

4. Historical Market Performance

Lastly, he’s assessed the reality that even if the market experiences its worst 20 years in history, returning only 4% per year, he would have ended up in the same position had he invested 100% in bonds.

5. Moral of the Story

The key takeaway is this: before you take someone else's word on your investment allocation strategy, it’s crucial to crunch the numbers yourself. Understand what is truly right for you and your risk tolerance.

If any of this resonated with you, please like and follow. I will continue to help you get closer to your financial goals.

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