Question

You are advising a client with $350,000 of retirement plan savings in their 401k. They are age 55 and currently 60% stocks, 40% bonds. Is that a good asset allocation given the outlook for the next year for stocks and bonds? Would you have any recommendations for them?

Make sure you justify your reasons.

Answer 1

No it's not an appropriate allocation among equity and bonds

As they are very near to retirement so they should focus more on bonds than equity

Moreover looking at markets down the next year , markets have become volatile with trade war crisis going on , crude prices are also rising . These factor will be putting presupre on equity markets. Also bond t bill rates have increased and fed is planning to increase rates . Adding all these up and looking that retirement is nearby , I propose allocation to bonds should weight more