Bucket portfolios aren’t rational, but they are perfectly normal and can be an effective tool for investors. Bucket portfolios are aimed at providing spending resources during investors’ decumulation periods, usually in retirement. They are typically composed of three buckets, arranged by time horizon and investment type. The first bucket contains cash, such as a money market fund, sufficient for spending as planned in the short horizon and set at one, two or perhaps five years. The second consists mostly of
Read more