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Investing Specialists

Do Streamlined Bucket Portfolios Make the Grade?

We stress-test a radically simpler portfolio, as well as one that foregoes a cash component.

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A Bucket Portfolio that was worth $1.5 million in 2000 would have soared to nearly $2.1 million at the end of 2017. It would have also supplied more than $1.4 million in cash flows over that same period, according to my recent "stress test."  

That sounds good, but is it, really? True, a bucket approach would have delivered on a main goal for many retirees: stability and growth of principal as well as real cash flow to meet in-retirement living expenses. From that standpoint, our hypothetical retirees are winning the game.

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Christine Benz does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.