The Setup:

Today we wrap up the five-part series on Busting the Biggest Financial Myths with a conversation on stocks and bonds. There’s a common belief that shifting to bonds removes all the volatility out of your portfolio, but that not a certainty. To help us explain this idea, we bring on a guest that specializes in building and maintaining client portfolios.

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Click the timestamps below to skip to a specific topic in the episode.

The Combination:

With interest rates dropping and some people worried about a market downturn, many investors are looking at conservative options that will take risk off the table. If that’s a strategy you’re considering, you might not have to make as drastic of a change as you might think.

On this episode Unlocking Your Financial Future, we wrap up a five-part series on ‘Busting the Biggest Financial Myths by examining the belief that shifting from stocks to bonds removes the volatility out of your portfolio. This is a pretty commonly-held belief but it’s not completely true. In fact, staying in stocks my be just as defensive in the long run.

Ben Schrock welcomes on his portfolio manager, Keith Lockwood, to help us with this conversation and explain why this statement is a myth. What does it actually mean to invest in bonds? How often should you be analyzing your risk? What about your evaluating your portfolio? All of those questions will be answered on this show, but Keith will also share a couple strategies he uses to protect clients from volatility without just shifting them to bonds.

We’ll also open up the mailbag on this show and take a listener question about picking an advisor and whether you should care about what age that person might be.


Key Points:

1:02 – The guest on today’s show is Keith Lockwood, the portfolio manager at BA Schrock.

1:56 – Bringing you up to speed on the series.

2:24 – The myth: You should shift from stocks to bonds to remove volatility.

2:40 – What does investing in bonds actually mean?

3:27 – So why is this not a true statement?

5:02 – Is there an age where people should be evaluating their risk level and start shifting it?

5:46 – How to structure your portfolio conservatively.

7:25 – We’re evaluating things on a daily basis but individuals should be looking at their portfolio at least once per year.

8:15 – Are there a lot of people having the discussion about stocks to bonds because of fears of a market downturn.

10:34 – Some final thoughts on this topic.

12:19 – Mailbag time

12:33 – Mailbag question: Should I work with a younger advisor with less experience or someone my age that will retire at the same time as me?



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Will You Need Less Income When You Retire – Busting Financial Myths, Part 2

You’ll Be in a Lower Tax Bracket When You Retire – Busting Financial Myths, Part 3

Financial Planning Can Be Done by Anyone with Technology – Busting Financial Myths, Part 4