The Conservative Portfolio aims to preserve purchasing power over time and match or beat inflation. When in retirement, DataDriven Advisors™ advise between 3-5 years of projected withdrawals be allocated to merely preserve purchasing power. In this manner, if a market crash occurs, your clients conservative money will hopefully remain intact. This provides a way to fund one’s life without having to “sell low” during market turmoil.
Thirty years ago, if you found a quarter on the ground you had two options. You could save it or you could buy a can of soda. If you saved it in a piggy bank and cracked open that piggy bank today, the quarter would still be there, but we would argue it was not safe. A can of soda now costs around a dollar, and we can’t buy much of anything for twenty-five cents. Inflation has taken its toll.